City of Plymouth Proposed 2022-2023 Budget - Flipbook - Page 274
By Anthony Minghine
T
$15,000,000
a dramatic reduction in state revenue
sharing. The third factor will be the
focus of this article.
Post retirement costs are a huge
issue that locals are grappling with.
Change here is difficult at best;
local governments are hamstrung
with contracts and laws that make
transformation slow. The property
tax declines local governments have
experienced could not have been
anticipated to the degree they occurred,
and are certainly out of the control of
anyone in this state. Statutory revenue
sharing, on the other hand, has been
unilaterally taken by the state to solve
its budget issues. It’s a fact. Revenue
sharing is paid from sales tax revenues,
which have been a remarkably stable
source of income, and have in recent
years experienced significant growth.
$10,000,000
Breaking Down the Numbers
here have been a lot of high
profile robberies over the
years. The Lufthansa robbery,
D.B. Cooper highjacking, the
Antwerp Diamond Caper...but these
crimes look amateurish compared to
the state of Michigan’s Great Revenue
Sharing Heist. The state has managed to
pinch over $6 billion in revenue sharing
from local government over the last
several years. Those numbers would
even get Bernie Madoff’s attention.
Michigan’s broken municipal
financing model is almost a cliché.
Talking about budget numbers and
deficits in the billions of dollars can
cause us to lose perspective. The fact
is, there are a record number of local
governments that find themselves in
the midst of a financial crisis. Is it the
result of mismanagement, neglect, or
incompetence? Or is it the result of a
dramatic disinvestment by the state in
local government? I suggest the latter.
In my view, there are three major
factors that have led communities to the
financial brink: post retirement costs;
a steep decline in property values; and
Annual Revenue Sharing Loss
$5,000,000
Actual Statutory
2013/14
2012/13
2011/12
2010/11
2009/10
2008/09
2007/08
2006/07
2005/06
2004/05
2003/04
2002/03
$0
Full Statutory
Hopefully you’ll stick with me, as I’m
about to drop the “b” word. From 20032013, sales tax revenues went from
$6.6 billion to $7.72 billion. Over that
same period, statutory revenue sharing
declined from over $900 million annually
to around $250 million. The state is now
in an enviable position—revenues that
exceeded expectations. It is posting
large surpluses but has failed to take
steps to restore local funding.
