Study: MI cities have 12% less revenue than 15 years ago

Michigan

LANSING, Mich. (WLNS) — A new study shows it’s a dismal picture when it comes to revenues for Michigan cities between 2002 and 2017.

The study was conducted by Public Sector Consultants and released by the Michigan Municipal League as part of the “Save MI City” program. It studied 225 cities in our state, and it found on average cities had 12 percent less revenue in 2017 than they did in 2002.

In Lansing, income was down eight percent while Jackson took a bigger hit being down by 17 percent.

Shanna Draheim, the Policy Research Labs Director for the Michigan Municipal League, says in addition to cuts in revenue sharing from the state, declining property taxes are also to blame. She added for local governments it is not just as simple as raising those taxes due to limits because of Proposal A and the Headlee Amendment. Those increases are limited to 5 percent or the rate of inflation, whichever is lower.

“Even when you see economic growth, rebounding, for example, after the recession. The economy feels better, right? We’re all happy, you know, things are getting better,” Draheim said. “But it limits the amount of growth in property tax increases.”

Draheim said the loss of revenue has caused cities to spend less, affecting important services.

“This is police, and fire. This is your parks, your recreation programming. This is absolutely additional funding for infrastructure like roads,” she said.

Mayor Andy Schor says Lansing is no exception.

“Do your best to budget and be fiscally prudent with the dollars to provide the services we can with the limited dollars that we have, especially for things like roads,” he said when asked how city leaders work through it.

The Michigan Municipal League says restoring revenue sharing and changes to the state’s property tax laws are just two of the ways the issue can be fixed. But they say something needs to be done.

“These are really bread and butter issues for most people,” Draheim said. “It impacts them on a daily basis in a way that, I think, some things in larger state budgets you don’t feel as much. But this is really your quality of life.”


Online:

Save MI City study

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