Beyond Balanced Budgets

River Rouge City Hall

Michigan’s local governments—large and small, urban and suburban—have experienced crushing declines in revenue in recent years. According to the Center for Local, State and Urban Policy, more than two-thirds of Michigan’s local governments experienced declines in property tax revenue and state aid in 2010. And more than a third continued to experience declines in 2013. In response, local governments have attempted to restructure, cutting spending and consolidating services. Still, the current broken system has left many cities on the brink of fiscal insolvency, some falling into emergency management—sometimes repeatedly.

Fixing Our Broken Municipal Finance System

On March 28, we brought local officials from around the region together at our Mayors & Managers policy forum: Fixing Our Broken Municipal Finance System. Attendees heard from members of the state-level Local Government Task Force on municipal finance, which is made up of representatives from the legislature, Department of Treasury, Governor’s office, local governments, universities and think tanks. The Honorable Edward J. Plawecki, Jr. walked us through the Task Force’s recommendations—recommendations like encouraging local governments to adopt multi-year budgets.

We’re grateful to UHY Advisors for hosting us, and to Mr. Plawecki for walking us through the Task Force’s process of selecting the above-mentioned recommendations, recommendations deemed both feasible and impactful in the near-term. Still, some of us in the audience left wanting more—more aggressive and long-term recommendations, big actions we can take to ensure Michigan’s local governments are able to provide the kinds of services residents (and potential residents) desire. This begs the question: should municipal finance reform be about more than balanced budgets?

Last week, we attended a conference sponsored by MOSES, the Hass Institute for a Fair and Inclusive Society, the Damon J. Keith Center for Civil Rights, and the Detroit-Wayne County Health Authority entitled Detroit Bankruptcy & Beyond. The goal of this conference was not to identify or organize around near-term solutions. Instead, conference organizers challenged attendees to think long-term—locally, regionally and nationally—and outside the box. The message was one of hope and optimism, as one after another, the speakers encouraged us to work together, build coalitions, and create a new agenda for Detroit and our region.

Reforming our current system, ensuring Michigan’s local governments can balance their budgets and provide services, is critical. According to the Center for Local, State and Urban Policy, less than half of Michigan’s local governments believe they can maintain existing service levels without reform. Moving forward, the Suburbs Alliance hopes to work with the Task Force and the group leading the ongoing Beyond Bankruptcy efforts. We believe Michigan’s local governments need both near-term and long-term solutions—we need balanced budgets and a new regional agenda.

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