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Pooling resources could help local governments afford services

May 5, 2017

The Next Idea

A survey of local government leaders across Michigan finds they are not happy with state government.

The latest Michigan Public Policy Survey conducted by the University of Michigan heard from officials in more than 1,300 cities, counties, townships and villages.

Among the survey results:

• 56% feel the system of funding Michigan’s local governments negatively impacts state-local relations.

• 67% say the state holds local jurisdictions to a higher standard than it holds itself.

• 70% of local leaders feel the state is taking away too much authority from local governments.

Most local government are struggling financially. Some worse than others. Part of it is due to the recession and the fall in real estate tax revenues, and the cut the legislature has made in revenue sharing, that part of the state sales tax where the legislature has some discretion.

A research group has been looking at ways local governments might band together to save money, since money is short.

Eric Lupher is president of the Citizens Research Council of Michigan. The report he just published is titled, "Counties in Michigan: An exercise in regional government." 

Lupher joined Stateside to talk about how money could be saved by having cities, towns and villages cooperate regionally to provide services to its citizens.

"It'll save money because we create what we call economies of scale in the world of economics," Lupher said. "We take things that are very expensive, whether those are fire trucks or the DPW trucks or libraries ... these are what we call capital intensive costs. Or we have instances where the people providing the service are very expensive."

"And when we look at how many local units of government we have in Michigan, many of them very small either in geography or in population," Lupher added, "we just don't have the ability to pay all of these people or pay for each of these very expensive goods on an individual basis. So by spreading that cost over a wider number of people, a wider geography, a bigger tax base, we're able to maintain the services but share the cost."

Listen to the full interview below to hear how the political power would shift with this system, and how you could ensure that all of the municipalities would pay their fair share. 
 

The Next Idea is Michigan Radio's project devoted to new innovations and ideas that will change our state.

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