What is Revenue Sharing?

Download PDF

• Local governments use state funding,
called revenue sharing, to pay for services
that make our communities the types of
places where people want to live and
businesses want to locate.

• Revenue sharing was promised to local
communities in the Michigan Constitution
to help pay for core government services
such as police protection, fire services,
roads, water, sewer and garbage collection

• It started in the 1920s when the State of
Michigan promised communities it would
streamline tax collection by eliminating
local taxes and replacing them with state
taxes. The State collects and records these
taxes and is suppose to reimburse local
jurisdictions to off set the general budgets
of local communities.

• In every budget since 2000, the State has
not fully returned revenue sharing as
required by statute. Ten consecutive years
of cuts have left local communities more
than $4 billion short on revenue sharing.

• The Michigan Legislature needs to
recognize the connection between the
essential services provided by local
communities as it relates to quality of life
and the economic vitality of our state.

• Local communities are the foundation of
successful economic development in
Michigan. Safe streets and functioning
infrastructure are critical to attracting and
maintaining businesses.

• Communities have reduced their services,
eliminated public safety positions and
consolidated services to deal with lost

• According to the Michigan Commission on
Law Enforcement Standards, there are
1,800 fewer police officers on the streets
of Michigan since 2001.

• Michigan’s Fire Marshall Office reports
2,400 fewer fire fighters since 2001.

• Senior, recreation and public library
programs have been drastically cut or

• Local governments cannot continue to
provide essential services if funding is
continually redistributed to other budget

Click here for recent media coverage of the revenue sharing issue.

Click here for talking points on revenue sharing.

©2022 Michigan Municipal League LLC. All rights reserved