Local Governments Show Decline In Economic Confidence

Aug 24, 2016

Credit MPRN

(MPRN-Lansing) More local government leaders are feeling insecure about their fiscal health than in years past. 

A new study shows the first decline in feelings about fiscal health since the end of the Great Recession in 2010. The University of Michigan sends surveys to local government leaders every year to see how they feel about their fiscal health. 31 percent said they were better able to meet their fiscal needs than the previous year. This is down from 38 percent last year.

Leaders also reported that state aid is decreasing and they are getting less in property tax revenues. This likely had an impact on their responses. Tom Ivacko is the Center Administrator at the Center for Local, State, and Urban Policy at the University of Michigan. He says while it’s still too early to tell if this is representative of a new trend, the results are still worrisome.

“It’s tough to say what’s going to happen,” he said. “But if this reversal can happen when the economy is improving, that’s a pretty big warning sign I think.”

Ivacko says it’s possible this is just a one year “blip” and next year local government officials will be back to saying their fiscal health is better than the previous year. He also says the survey needs to be examined as part of the bigger picture.

“It’s important to have kind of a nuanced view as Michigan is a big complex state with a lot of different types of communities,” he said. “A lot of different types of local governments. Some are doing better than others.”