A Tale of Two Counties: Reconciling Differences in Fiscal Stress Across Similar Rural Communities in Michigan

January 2021
Anthony J. Martinez and Capri Backus

This case study compares two municipalities (Counties X & Y) with similar demographic characteristics and economic growth trajectories across objective and subjective indicators of fiscal health. After studying the financials of Counties X and Y, we found that fiscal ratios alone cannot completely explain why they rated their own fiscal health quite differently in the Michigan Public Policy Survey. Instead, we hypothesize that these ratings are based on transition periods: whether a healthy county is getting “sick,” or whether a sick county is improving its financial health. It is suggested that local governments are evaluated across a broader range of financial circumstances to establish a more comprehensive understanding of their fiscal health.