Thomas Ivacko is an administrator and program manager at the Center for Local, State, and Urban Policy at the Ford School. He also oversees the Michigan Public Policy Survey program, which conducts state-wide surveys of local government leaders.
We surveyed local leaders across Michigan for the last six years and what we found is that local government fiscal health was in a tailspin back in 2009 at the end of the Great Recession and it got even worse in 2010. But in 2011, we found the beginning of a new trend of gradual fiscal improvement. That has continued for a fourth year now into 2014.
In fact, for the first time we have just crossed a tipping point where more local governments (36%) tell us that they are doing better today than they were a year ago compared to those who say they are doing worse (24%). So this is up significantly from the low point in 2010 when just 9% were doing better and 61% were doing worse.
To understand fiscal health we asked local leaders if their jurisdictions are better able or less able to meet their fiscal needs today compared to a year ago and so for the 24% that are doing worse today local leaders tell us it is due to a wide range of factors. Compared to the places that are doing better they are more likely to tell us they have had cuts in property tax revenue, cuts in state aid and fiscal and federal aid, increase in tax delinquencies and home foreclosures. They are also more likely to tell us they face increasing public service demands so they have more pressure to spend more on infrastructure, human services, public safety and so on. So fiscal health is due to a wide range of factors on both the revenue and expenditure sides of the ledger.
Looking ahead 35% of local leaders expect their jurisdictions to be better off a year from now but a stubborn 22% expect to be even worse off so overall that’s not much more progress than what we’ve seen in the last year. In one particularly worrisome finding is that among jurisdictions that are worse off today, 76% expect to be even worse off a year from now and by comparison to those who are better off today, 81% expect to be better off a year from now and so this really points to two different groups of local governments that are moving in two different directions.