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Michigan Municipal League
Michigan’s Broken Municipal Finance System
Michigan Municipal League Michigans Broken Municipal Finance System - - PowerPoint PPT Presentation
Michigan Municipal League Michigans Broken Municipal Finance System - - PowerPoint PPT Presentation
Michigan Municipal League Michigans Broken Municipal Finance System What is happening to Michigans Cities, and why should you care? The issues Michigans municipal finance model is broken Municipal Funding doesnt track with the
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The issues
Michigan’s municipal finance model is broken
- Municipal Funding doesn’t track with the
economy
- Many problems cannot be fixed locally
- Not enough tools in the toolbox
- Need a 3 tiered approach
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Local Government Budgets
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Nearly 2/3 of the average municipal operating budget is funded by revenue from only two sources - property taxes and revenue sharing
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Local Government Revenue
* MI Treasury F-65 Data from 225 cities – Inflation Adjusted
11.9% Total revenue decline
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Statutory Revenue Sharing
FY20 budget still $53M below FY11 level
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Constitutional Revenue Sharing
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Kalkask ska $859 59,202 02 Kingsl sley $693, 3,135 35 Ludin ington
- n
$4,443,1 3,196 Lansing sing $100,63 ,632,1 ,161 61 Big Rapids pids $8,650 50,77 774 Elk Rapi pids $685, 5,537 537 Frase aser $7,239,48 ,488
$8.6 Billion
In Lost Revenue Sharing Since 2002 For Cities, Villages, Townships, & Counties
Grand d Rapid ids $128,093,8 93,809 Det etroit it $1,446,68 446,683,7 3,788 88 Mancelo elona na $864,75 ,751 Thomps psonvil nville le $260,5 ,534 34 Traverse verse City $7,227 27,425 ,425
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Property Taxes/Values
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Headlee vs Proposal A
- Headlee Amendment (1978) limits a community’s
property tax revenue growth to the rate of inflation.
- Proposal A (1994) limits an individual parcel’s
assessed value growth to 5% or the rate of inflation, whichever is less.
- Unanticipated consequences during a recession –
property values drop and community unable to recover.
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26%
GF/GP & Restric ted
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- 10.00%
10.00% 30.00% 50.00% 70.00% 90.00% 110.00%
Hawaii South Dakota Iowa Idaho Wyoming Mississippi Oregon Florida New York Missouri Louisiana Kansas New Mexico Rhode Island Maryland Oklahoma North Carolina Connecticut Arkansas Arizona New Hampshire Virginia Nebraska Maine Ohio
Growth in Municipal General Revenue 2002 - 2012
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- 60.00%
- 10.00%
40.00% 90.00% 140.00% 190.00% 240.00% North Dakota Vermont South Dakota Alabama Oregon Texas Delaware Missouri Louisiana Idaho Alaska Montana Utah Tennessee Indiana Hawaii Washington Wyoming South Carolina North Carolina Nevada Connecticut Mississippi Oklahoma Virginia Arizona New York West Virginia Colorado Rhode Island Iowa New Mexico Pennsylvania Maine Illinois Florida Georgia Arkansas Ohio New Hampshire Massachusetts Maryland Wisconsin New Jersey Nebraska Kentucky California Minnesota Kansas Michigan
Change in Municipal Revenues From State Sources
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Payroll Comparison 2002 - 2012
14.6% 33.5% State Payroll Cities, Villages, Twp, and County Payroll Municipal Payroll 24.3%
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What do we do?
Costs Revenues Structure
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What can we do?
- Remove the conflicts between Headlee
Amendment & Proposal A allowing local revenue to better track with the economy.
- Prioritize investment in Michigan
communities by partnering with local government and systematically begin to restore revenue sharing.
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What can we do?
- Provide more local funding options for locals to
fund critical services & infrastructure.
- Equip local units with the tools to modernize
legacy benefits.
- Reduce the cost of government by changing
existing laws that discourage duplication of infrastructure & services.
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