Economic Development and Government

Local governments blasé about State of the State

January 17, 2014
| By Pete Daly |
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Unlike many business executives, some government officials in Michigan were rather blasé today about Gov. Rick Snyder’s State of the State address last night.

“Overall, I think the State of the State probably leaves most local governments kind of underwhelmed,” said Tom Ivacko, who has been surveying local governments in Michigan for several years at the University of Michigan’s Center for Local, State and Urban Policy within the Gerald R. Ford School of Public Policy.

The speech had “very little focus” from the perspective of Michigan’s local governments, said Ivacko, whose in-depth surveys indicate local governments believe the system of funding them is broken.

Ivacko said Snyder made no reference to “reversing course” on what Ivacko calls a “massive disinvestment” by the state over the last decade in local government finance, resulting in $6 billion in cuts.

Some representatives of the state’s major municipal and county associations repeated that viewpoint.

“From a local government perspective, there wasn’t a whole lot in this State of the State that dealt with local units of government,” said Deena Bosworth, director of governmental affairs at the Michigan Association of Counties.

She noted that local units of government “collectively have forgone something like $6 billion in revenue sharing over the past decade. That’s a significant amount of money. There is a statutory formula that says how much money (collected by the state) should go to revenue sharing, and that’s been completely set aside.”

“We would like to see the governor recognize . . . that local governments were not only a partner in improving Michigan’s economy, but that we also sacrificed a significant amount of revenue and resources, in order to help the state right itself. We would have liked to have seen a little more recognition of our contributions,” added Bosworth.

She noted that county governments are required to provide courts, jails and sheriff patrols, foster care, public health services, rural drains — “not the sexiest of services but essential services, nonetheless.”

“There was no mention of re-investing in communities or fixing the state’s broken municipal finance system,” said Samantha Harkins, director of state affairs at the Michigan Municipal League.

In regard to the state’s announcement this week of a budget surplus, MML president Jacqueline Noonan, the mayor of Utica, said the MML supports Snyder’s call to fix Michigan’s crumbling roads, “but we grow increasingly disappointed in the total lack of concern for fixing the state’s archaic and broken municipal finance system.”

She said that “unless and until the legislature and governor stop raiding funds that by law were supposed to go to local communities for police and fire, roads and bridges and other essential services, Michigan’s per-capita income levels will continue to lag other states and the nation and more of our cities will plummet into fiscal crisis.”

“There wasn’t a lot of specifics directed at local government, and that’s fine. We’re not looking for a lot of initiatives out of state government at this time,” said Larry Merril, executive director of the Michigan Townships Association.

He said Snyder’s mention of an early warning system regarding Michigan communities and school districts sliding into fiscal trouble is supported by the townships, but road repair is a big issue, too.

He noted that Snyder has alluded to state support of road repair, and “we hope, after the State of the State, there will be more discussion about using the state surplus (for a) permanent solution for chronically underfunded roads.”

Ivacko said the proposal for an early warning system for local communities in financial trouble “would be a good thing to do, and certainly would help some local governments. But, overall, I think most local governments are not in a state of outright fiscal crisis right now and so it’s going to help a relatively small number of local governments directly.”

He noted that local government finances seems to be “a relatively low priority, but of course there are an awful lot of things for Michigan to fix.”

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