Matt Bach, Director of Media Relations
Michigan Municipal League
FOR IMMEDIATE RELEASE: April 15. 2014
New CRC Study is Another Example that Michigan’s System of Funding Local Governments is Broken
The following statement is from Utica Mayor and Michigan Municipal League President Jacqueline Noonan about a new study by the highly respected Citizens Research Council. The study shows that state tax revenues increased by $1.2 billion from 2009 to 2012, while local tax revenues declined by $1.1 billion in the same time period. This is further proof that the state has balanced its budget on the backs of local communities while at the same time placing additional requirements, stipulations and bureaucratic red tape on local governments in the form of the cumbersome and problematic Economic Vitality Incentive Program (EVIP).
“Simply put, these findings are an outrage,” said Noonan. “The state continues to divert revenue sharing away from local governments while the state’s surplus grows to nearly a billion dollars. After taking our money, the state then has the audacity to criticize Michigan’s cities and villages for not operating efficiently. It would be like someone taking money out of your wallet and then a day later penalizing you for not having any money. The partnership between state and local governments is broken, and it’s time to fix it.”
The revenue sharing diversion, coupled with declining property tax revenue, has forced Michigan’s local governments to seek local millage increases, as well as make substantial cuts just to stay afloat. A recent study by the Michigan Municipal League using data from the state Department of Treasury showed that the state has diverted $6.2 billion in revenue sharing dollars away from local governments since 2003.
Had the funds not been diverted by state lawmakers, the fiscal crisis facing many local Michigan communities today might not be so severe. Statutory revenue sharing funds are earmarked by state law for local communities across Michigan to support essential local services including police and fire, water systems, road maintenance, parks and libraries, and more.
For years local leaders across the state have called on the governor and Legislature to end their annual raids of statutory revenue sharing funds. We appreciate Governor Snyder proposing a 15-percent increase in his Fiscal Year 2015 budget recommendation—the first significant increase in a decade. We look forward to working with the governor to reinvest in communities. Unfortunately, since the governor’s recommendation, some Michigan lawmakers have proposed diluting revenue sharing even more by spreading it to more than 1,000 additional local governments, many of which don’t provide essential services that cities, villages and urban townships provide.
The Michigan Municipal League calls on the Legislature to fix the broken partnership between the state and communities and to work together to create the places where people want to live, work, play and create jobs.
For additional information contact the League’s Samantha Harkins at email@example.com or (517) 908-0306.
View the full CRC study here: http://www.crcmich.org/TaxOutline/TaxOutline.pdf
The 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.