Tom Ivacko: More local leaders say finances are on the upswing, but challenges remain

The Michigan Public Policy Survey has been tracking local government fiscal health since 2009. Our latest survey in 2013 finds a continuing trend of gradual improvement in fiscal health, so as of today, about 29 percent of jurisdictions are better off than they were a year ago. The percentages may not sound particularly good, but when we compare it to the low point in 2010 there is significant improvement. Back in 2010, 9 percent were better off jurisdictions and 61 percent were worse off. 
Looking ahead, local leaders are not particularly optimistic, about 28 percent think they will be better off than a year from now, but 30 percent think they will be worse off than they are today. We think these concerns are tied to few different things. We know that service demands are continuing to increase and, in particular, demand in infrastructure. But local leaders have told us they think the system funding local government just won't provide enough revenue in the future for them to maintain the services they provide today, much less to improve them.
One of the consistent finding from five years of the survey is that the fiscal challenges have been worse in big jurisdictions than small jurisdictions. Big cities more so than small cities have had declining revenue and rising costs. At the same time during the trend of improvement that started in 2011, what we found is that conditions are getting better, faster in big jurisdictions than small ones. So as of today about 25 percent of small jurisdictions are better off than a year ago. The same is true of 44 percent of the big jurisdictions, so it looks like the big jurisdictions are kind of the bellwether for local government fiscal health. They led the way into the fiscal crisis in 2009 and 2010, but since 2011 they have been leading the way back out.