City of Plymouth Proposed 2022-2023 Budget - Flipbook - Page 283
CRC Memorandum
governments. Funding would be restricted to specific public services related to the health and safety
of residents – police protection, fire protection,
emergency medical services (EMS), courts, county
health programs, and water and sewer quality services. This would bend the rules for state revenue
sharing in many ways. Such a program would have
to meld the revenue sharing programs that direct
funding to cities, villages and townships with that
which provides funding to counties. This approach
would direct funding to the services without regard
to the entity responsible for providing that service
in different areas of the state.
Pros and cons are associated with such an approach.
By tying the funding to specific programs, it might
make it harder for future legislatures to redirect
funding for state purposes as has often occurred
throughout the history of state revenue sharing.
Alternatively, funding is fungible. The addition
of funds for a specific service may simply free up
existing local funds dedicated to that service to be
redirected for other services. While on its face this
might appear as a move away from unrestricted
state revenue sharing, in the end it may provide the
same freedom of spending as the current program.
Such a program would require assembly of multiple
measures of services provided by the state’s public
safety entities. A police measure could use data
reported to the state and the Federal Bureau of
Investigation of crimes reported and cases cleared.
A fire measure could be comprised of the number
of fires and emergencies occurring within each department or authority’s geography. Similar measures
could be assembled for emergency medical services.
Recommendations and Alternatives
There are no clear answers to the matter of reforming
Michigan’s statutory state revenue sharing program.
Accordingly, recommendations are focused on decision points for state policymakers. The alternatives
offered below offer distribution methods that would
get funding to Michigan’s communities most in need
in terms of their abilities to raise revenues or their
service delivery demands.
Recommendations
The first recommendation is for state policymakers to
decide if the statutory state revenue sharing program
is a priority. If it is, its importance must be emphasized by a return to funding at the levels designated
in statutory law. FY2014 funding levels equate to
roughly a 75 percent cut in funding from the statutory base. After funding is sent to Detroit, which is
arguably inadequate to meet the city’s needs, there
is not sufficient funds available to meet the needs
of other local governments. If it is not the priority
it once was, they should end the illusion and direct
the funding to meet other needs.
If revenue sharing is a priority, then the second recommendation is for state policymakers to examine
the purpose of local government and the role they
see statutory state revenue sharing helping to serve
that purpose. This analysis was done based on the
idea that local governments exists to manage the
interaction between people. This need not be the
only role local governments are deemed to fill.
Based on CRC’s understanding of this purpose, it
therefore makes sense that the role of statutory
state revenue sharing is to ensure that all local
governments are equipped to perform this purpose
at a minimum level. This can be done by directing
funding to affect differences in fiscal capacity or by
directing funding to the places or services that the
state values.
Alternatives
CRC suggests the consideration of either of the following two approaches to achieving this aim:
1. A formula that considers both the capacity of a
government to raise revenues and the demands
placed on a government to provide services.
2. A program that moves away from the unrestricted
nature of state revenue sharing to fund public
safety programs.
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