Michigan local government officials report improved fiscal health after a year of COVID-19, but not yet back to pre-pandemic levels

December 2021

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 13 statewide survey waves of the Michigan Public Policy Survey (MPPS) conducted annually each spring from 2009 through 2021. The Spring 2021 wave of the Michigan Public Policy Survey (MPPS) was conducted between April 5 – June 7, 2021.

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Key findings

  • After a year of the COVID-19 pandemic, Michigan local governments report improvement on many fiscal health measures, as of spring 2021. Overall, 27% of local  governments say they are better able to meet their fiscal needs compared with last year, up from 15% in 2020, but still below the 36% that said the same in 2019. Meanwhile, 21% say they are currently less able to meet their needs (down from 34% last year), and 48% report no change from last year. 
    • By population size, the state’s larger jurisdictions tended to report the biggest declines in this measure of fiscal health last year, but they now report the largest rebounds. Also, by jurisdiction type, counties report the strongest rebound on this measure since last year. 
  • However, another MPPS summary indicator that appears to capture more fundamental and less transitory aspects of fiscal health—the 10-point Fiscal Stress Index—shows much less change in fiscal health over time. As of Spring 2021, 65% rate their governments’ fiscal stress as relatively low (at 4 or lower on the 10-point scale), while 7% say it is high (at 7 or higher on the scale), both of which are essentially unchanged from last year. 
  • Reflecting these mixed signals on fiscal health, more jurisdictions report increasing revenue from property taxes and state aid now compared to prior years. However, concerns about jurisdictions’ general fund balance remain largely unchanged since 2020, and the largest jurisdictions now report a three-year trend of increasing concerns.
  • On the spending side, jurisdictions report increased infrastructure (55%), human services (37%), and public safety (36%) needs, but also predict corresponding spending increases for infrastructure and public safety. Meanwhile, 18% of jurisdictions plan to increase overall service provision in the next year, up from 10% that said the same in 2020. 
  • Looking ahead, optimism about local economic conditions rebounded significantly in 2021, with 42% of local leaders predicting “good times” financially in their local communities in the coming year—up from 13% last year—while just 16% predict “bad times” today. 
  • However, officials are more cautious about their jurisdictions’ abilities to meet fiscal needs in the coming year. Statewide, 29% predict their jurisdiction will be better able to meet its fiscal needs in the next year, while 19% say they will be less able. 
  • Looking farther down the road, 59% of local officials predict low fiscal stress five years from now, down from 65% who report low stress today. However, the percentage predicting particularly high levels of stress five years down the road (11%) is unchanged compared to last year, when COVID-19 concerns were high.

Better able to meet fiscal needs


The percent of local governments that say they are better able to meet their fiscal needs compared with last year is up from 2020, but still below 2019 Spring 2021 MPPS

Low fiscal stress


As of Spring 2021, two-thirds of jurisdictions rate their governments’ fiscal stress as relatively low (at 4 or lower on the 10-point scale) Spring 2021 MPPS

Increased infrastructure needs


More than half of jurisdictions report increased infrastructure needs, but also predict corresponding spending increases in the next year Spring 2021 MPPS