Local Governments Not Starved For Cash
Local municipalities saw an increase of $1.4 billion in property taxes from 2000 to 2013 with that revenue increasing to $5.3 billion in 2013 from $3.9 billion in 2000, according to the state tax commission.
The municipalities received about $1 billion more in property tax in 2008 compared to 2000 with inflation factored in. By 2009, the property taxes collected had reduced to the point they were relatively the same as 2000 with inflation.
Communities across Michigan have complained about revenue problems with some elected officials saying they don't have enough money to provide basic services. But a look at the numbers shows that the money flow may have slowed, but it has not significantly declined.
There are 533 cities and villages and 1,240 townships. There were 12 cities and townships in financial emergencies, but Ecorse, Benton Harbor and Pontiac have recently emerged from their emergency status and the state has turned over the finances back to the local municipalities with some state monitoring.
Property taxes since 2000 peaked in 2008 and then slightly declined. Property taxes seem to have reached a plateau in 2013.
For example, Washtenaw County collected $426.6 million in property taxes in 2000 and saw that increase to $685.6 million in 2008. In 2013, Washtenaw County collected $631.8 million in property taxes, about $54 million more than the amount it collected in 2000 when it is adjusted for inflation.
Washtenaw County was aware of the downward projections of property tax in 2008. The county used conservative estimates when budgeting and reported that the actual revenue that came in was above budgeted projections.
"We gradually reduced our expenditures over that period utilizing various strategies until we evened our revenues and expenditures," said Washtenaw County Administrator Verna McDaniel. "I am proud to say that we now have a four-year balanced budget for 2014 through 2017. … It is important not to minimize the challenges we all faced and dealt with to balance our budget and bring our expenditures in alignment with our revenues."
James Hohman, assistant director of fiscal policy for the Mackinac Center for Public Policy, said there's a narrative that municipal finance is broken and that there will be ever-more emergencies.
"But the facts are speaking differently," Hohman said.
Editor's Note: The article has been corrected with the correct number of townships in the state.
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.