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Cities across the state struggle to make ends meet

Brian Stansberry

Cities statewide have been struggling financially, according to the Michigan Municipal League.

The league is proposing legislative solutions to help balance municipal budgets.

Matt Bach is with the Michigan Municipal League. He said city revenue has not tracked with the economy.

“People might think ‘oh the economy is getting better there is more jobs, there are more things happening.’ Which is true, Michigan’s economy is improving, but Michigan’s cities aren’t seeing that because of the way things are structured. The cities aren’t seeing that growth.”

Bach said there are a number of ways that the improving economy has failed to be reflected in municipal budgets.

“When the property taxes decreased with the Great Recession a few years ago the revenue that cities were getting went down, which it should have been, I think most people understand that. But now that the property taxes have been going up the way it’s currently structured has been capped what the increases can be to local governments.”

And Bach said, particularly with revenue sharing, a percent of money from sales tax should have come back to cities.

“Since 2002 the state was supposed to through previous agreements give local communities about 8 point 1 billion dollars that they opted not to give back to the cities. They instead decided to keep that money and fill there own state budget shortfalls. So really they balanced the state’s budget on the back of local communities.”

Bach said that more made city budgets tight - and in some cases resulted in a rollback in services cities offer to residents.