Using financial data reported to the State of Michigan in 2023, a new report from CLOSUP's Fiscal Health Project provides an annual update on Michigan local government fiscal health. This report analyzes local government data to develop a set of indicators to look at cash, budgetary, long-term, and service solvency for counties, cities, villages, and townships in Michigan. It finds that there were few significant changes in overall trends for the fiscal health of Michigan local governments compared to the past few years. Federal aid continues to bolster general fund balances and cash reserves, resulting in strong cash and budgetary solvency measures. However, local governments should beware of “fiscal cliffs” as one-time revenues from pandemic-era aid expire. Local governments continue to show variability in their ability to meet long-term financial and service obligations, due in part to restrictive revenue policy and high long-term liabilities from pensions and retiree healthcare benefits.
