Is the State “Starving” Your Community of Funding?

Why aren’t municipalities benefiting from Michigan’s supposed comeback?

Great Lakes Economic Consulting

FOCIS Wayne State University

Even as the economy improves in Michigan, our cities and towns continue to struggle financially. Many communities have found it difficult to provide basic services and maintain their crumbling infrastructure. We see this in Flint, a city poisoned by its own drinking water system. We see it in Detroit, where decisions are regularly made about what services and areas of the city take priority with limited resources to spread around. 

Why is this? Why aren’t municipalities benefiting from Michigan’s supposed comeback?

Detroit Today host Stephen Henderson speaks with economist Mitch Bean, the former director of the nonpartisan state House Fiscal Agency, currently with Great Lakes Economic Consulting. He recently wrote a column for Bridge Magazine titled “Starving Michigan Cities and the Coming Storm.” He’s is joined by former Detroit City Councilperson Sheila Cockrel, who now heads up Crossroads Consulting.

According to Bean’s recent story in Bridge Magazine, “municipal revenue from state sources declined 56.9 percent from 2002 to 2012.” Michigan is one of only four states that saw a decline in municipal revenue from state sources, the second largest decline was Kansas at 14.3 percent.

“We’ve shifted the burden of funding cuts to municipalities from the states,” says Bean. He tells Henderson that the change in statutory revenue sharing happened with an amendment in 1998 to the Glenn Steil Revenue Sharing Act. He writes in Bridge Magazine that, “Policy actions during the administrations of Michigan’s three most recent Governors have degraded state municipal finance through tax changes that reduced the tax base municipalities rely upon by tens-of-millions of dollars; and by direct cuts to statutory revenue sharing that have reduced municpal finances over $5.5 billion since 1998.”

Cockrel explains that in her experiences in dealing with this in Detroit City Council, “you do less with less, and eventually, the less reaches the point where your no longer able to deliver even a minimum quality of service.” Cockrel warns, “At some point, even cities like Northville…your day is coming too.”

Click on the audio link above to hear the entire conversation.