Matt Bach, Director of Media Relations
Michigan Municipal League
FOR IMMEDIATE RELEASE: Oct 10. 2013
New Policy Plan Seeks to Restart Investments in Michigan Cities and Protect Local Revenues Moving Forward
Republicans, Democrats and Local Officials Propose “Partnership for Place”
LANSING, Michigan — Republican and Democratic state lawmakers joined today with local government leaders to propose bold new policies to fix Michigan’s archaic and broken municipal finance system and end decades of disinvestment in the state’s most important economic areas.
At a Lansing news conference, they proposed a set of policy changes in a plan called the “Partnership for Place: An Agenda for a Competitive 21st Century Michigan.” The plan advances new ways to end a decade of funding cuts to Michigan cities, to protect future funding for local services from raids by the Legislature, and to create the types of places across the state where economies can prosper in today’s global economy. In particular, it focuses on transportation, infrastructure, ways to attract and retain more educated workers, and new development tools that will help create the types of cities and places that are thriving in today’s world.
“This plan presents bold policies to help Michigan cities recover from more than $5 billion in cuts that the state Legislature and governor have made to local communities in the past decade,” said Utica Mayor Jacqueline Noonan, President of the Michigan Municipal League (MML), which led the effort to create the plan. “This plan also protects funding for local services such as police and fire protection from future raids by Lansing, and it proposes to end the decade-long disinvestment in Michigan cities where most of our state’s jobs and people continue to be. States with thriving economies have thriving local communities. This plan gives local leaders and citizens the tools to create thriving local communities.”
A report released in September by the highly respected and independent Citizens Research Council of Michigan found that the Legislature slashed local revenue sharing funding by $5 billion over roughly the past decade and used the revenues to help balance the state budget and increase state spending. During that same period, state spending increased more than 26 percent while local communities were forced to make significant service cuts and layoff thousands of workers.
MML CEO & Executive Director Daniel Gilmartin said many of the plan’s recommendations will require legislation and other action from Lansing. He said that while not all Republicans and Democrats support the entire plan, “we have strong bipartisan recognition of the need to provide stable sources of revenues for local communities that future legislatures can’t touch and that will help restore prosperity to local economies.”
“There is broad agreement that Michigan’s municipal finance system is archaic and broken, and there is broad agreement that we must stop the disinvestment in the state’s most important places to live, work, learn and raise families,” Gilmartin said. “This plan points Lansing in the direction of finding solutions.”
The Partnership for Place proposes:
Looking at creative ways to raise revenue to provide stable funding to local governments for police and fire protection, clean and safe drinking water systems, road and bridge maintenance, neighborhood amenities such as parks, and more.
Giving local communities new local funding options. Under the state’s broken municipal finance system, local revenues largely come from just three sources: property taxes (property values have plummeted in Michigan in the past decade), state revenue sharing (which the CRC study confirmed has been raided by the Legislature and governor), and fees and fines. Many states give local communities broad local funding options, often with voter approval.
Establishing new ways to help local communities pay legacy costs, including unfunded retiree benefits in addition to pensions called OPEB (Other Post-Employment Benefits). Across the nation, state governments and communities large and small are struggling to pay benefits and pensions they were obligated to cover from decades ago. A recent Michigan State University study pegged total OPEB liability for Michigan cities, villages and townships at $13.5 billion, with only 6 percent of the amount funded. The net unfunded liability is $12.7 billion.
Significantly increasing funding for long-neglected road and bridge repairs in Michigan. In addition to a gas tax increase to raise $950 million in new transportation funds each year, change the formula in Public Act 51 that the state uses to appropriate the funds. The formula was created in 1951—62 years ago—and no longer distributes funds based on the most pressing road and transportation needs. Earmark more funds for public transportation, “complete streets” and other alternatives to driving that help make states and cities attractive to the best, brightest and highest-income workers and the industries that employ them.
Forming policies to make Michigan and its cities more attractive to “talent”—young, educated workers who earn the highest incomes and who leave the state in large numbers to live, work and play in places that have more opportunities for rental housing, public transit, access to cultural activities, fun and thriving urban centers and neighborhoods, and more.
Gilmartin said the League will be working with state lawmakers in the coming months and years on legislation to implement key parts of the plan. A brochure presenting all of the Partnership for Place proposals is at http://www.mml.org/advocacy/partnership-for-place.html.
Michigan Municipal League advocates on behalf of its member communities in Lansing, Washington, D.C., and the courts; provides educational opportunities for elected and appointed municipal officials; and assists municipal leaders in administering services to their communities through League programs and services.