Michigan local leaders report near-term improvements in fiscal health, especially in large jurisdictions, yet long-term concerns increase
This report presents Michigan local government leaders’ assessments of their jurisdictions’ fiscal conditions and the actions they plan to take in the coming year given their financial situations. The findings are based on responses from 14 statewide survey waves of the Michigan Public Policy Survey (MPPS) conducted annually each spring from 2009 through 2022. The Spring 2022 wave of the Michigan Public Policy Survey (MPPS) was conducted between April 4 – June 6, 2022.
Key findings
• Despite significant infusions of federal and state aid in recent years, Michigan local leaders’ assessments of their fiscal stress as of Spring 2022 remain essentially unchanged compared to both 2021 and 2020. Statewide, 65% of local leaders rate their governments’ fiscal stress as relatively low (a score of 4 or lower on the MPPS 10-point Fiscal Stress Index), while 7% say it is high (at 7 or higher). Those 7% with high fiscal stress represent approximately 130 Michigan local governments.
• By population size, the state’s largest jurisdictions—those with over 30,000 residents–continue to report the most improvements in this measure of fiscal health. By contrast, there’s been some decline among the smallest jurisdictions—those with under 1,500 residents— with 57% reporting low fiscal stress this year, down from 62% in 2021.
• Another measure, one which captures short-term change in fiscal health year-over-year, shows fiscal improvement this year. Statewide, 42% report they are better able to meet their fiscal needs in 2022 compared with last year, the highest percentage since the MPPS began tracking in 2009. However, local officials say these are relatively small shifts, not significant changes. Meanwhile, compared with last year, 16% say they are currently less able to meet their needs (a decrease from 21% in 2021), and 39% report no change.
• Jurisdictions of all sizes report improvements in this measure of year-over-year fiscal health, with the state’s largest jurisdictions reporting the biggest jump (78% better able to meet fiscal needs this year compared to last).
• Positive year-over-year improvements in fiscal health correspond to higher percentages of jurisdictions also reporting increased revenue from property taxes, fees for services, and federal and state aid in 2022 compared to prior years. In another positive sign, an earlier trend of increasing concerns about general fund balances in larger jurisdictions reversed in 2022.
• However, looking ahead to next year, most predict fiscal health will simply remain stable, with 41% statewide predicting no change. Just a third (33%) expect their jurisdictions will be better able to meet their fiscal needs in the coming year, while 17% say they will be less able.
• Looking further down the road, there is increased long-term pessimism among local leaders, up significantly from last year’s predictions. These future concerns come despite recent boosts of federal and state funding to many local governments, such as ARPA. Statewide, 55% predict they will have low fiscal stress five years from now (a drop from 65% who have low stress today), while 14% predict high levels of stress in five years (double the percentage with high stress today). Among the state’s smallest jurisdictions, fewer than half (49%) predict low stress in five years; among jurisdictions with more than 10,000 residents, 19% predict high stress long-term.