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Local leaders: Funding reforms needed to avoid service cuts

ANN ARBOR—Local government leaders in Michigan report that the way their jurisdictions are funded requires significant reform to maintain services in the wake of the Great Recession, according to a University of Michigan survey.

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Fewer than half of local leaders, or 43 percent, believe the system of funding local government in Michigan would allow them to maintain their current packages of services in the future, even if the economy continues to improve, according to the poll by U-M's Ford School of Public Policy.

The poll, part of the Michigan Public Policy Survey series at the Ford School's Center for Local, State, and Urban Policy, reports that:

  • Overall, just 26 percent of local leaders surveyed think the current funding system would allow them to improve current services or provide new services.
  • A majority, or 58 percent, of local officials believe the state's system of funding local government needs significant reform. That number increases to 77 percent for the largest municipalities.
  • Of the 58 percent who say reform is needed: 89 percent cite the gasoline tax; 83 percent point to the sales tax; 82 percent cite the Headlee Amendment; 81 percent say Proposal A needs reform; and 80 percent say revenue sharing needs reform.

The percentage of all jurisdictions that were less able to meet their fiscal needs has fallen significantly since peaking at 61 percent in 2010. Last year, 34 percent of all jurisdictions reported that they were less able to meet their fiscal needs. Despite this recent improvement, many local leaders foresee trouble ahead if the funding system is not reformed.

The study, conducted April-June 2012, involved surveys sent via hardcopy and the Internet to top elected and appointed officials in all counties, cities, villages and townships in Michigan. A total of 1,329 jurisdictions returned valid surveys, resulting in a 72 percent response rate. The survey had a margin of error of 1.43 percentage points either way.

 

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