News Story

Lobbyist Cites Yesteryear’s News To Urge More State Money For Cities

Uses figures from state’s ‘lost decade’; ‘Name a thing Michigan wasn’t worst at’ then

In a recent article titled, “Michigan has abandoned cities,” the head of a lobbying organization for state municipalities claimed Michigan has had the worst state government in the country when it comes to providing financial support for cities.

However, Michigan Municipal League CEO Dan Gilmartin based his comments on data that is six years old and from a time when the state was just starting to recover from nationwide Great Recession and its own Lost Decade of the 2000s.

“The state of Michigan ranks dead last in the nation when it comes to supporting our communities. This disinvestment in our communities has resulted in our local officials limping along trying to do more with less,” Gilmartin wrote in a Sept. 28 op-ed that appeared in Bridge Magazine.

Matt Bach, spokesman for the MML, said Gilmartin’s claim was based on U.S. Census data from 2002 to 2012.

“Name a thing Michigan wasn’t worst at over that period,” said James Hohman, director of fiscal policy for the Mackinac Center for Public Policy.

Michigan’s unemployment rate was over 9.0 percent in 2012. But the state economy and the finances of municipalities have improved greatly since then. In August, for example, Michigan’s unemployment rate was down to just 4.1 percent.

Revenue sharing — money the state takes primarily from sales tax collections and then distributes to municipalities – rose from $1.04 billion in 2011-12 to $1.31 billion in 2018-19.

And property tax collections across the state – the largest revenue source for municipal governments – increased from $12.76 billion in 2012 to $13.98 billion in 2017. The property tax revenue for 2012 was the lowest collected since 2004.

The city of Lansing, to cite one city, has seen total operating fund revenues increase from $101.0 million in 2012 to $126.6 million in 2017. The 2012 figure of $101.0 million would be equivalent to $107.8 million if stated in 2017 dollars. That means that even after adjusting for inflation, the city is collecting an extra $18.8 million in operations revenue compared to five years earlier.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.