A report recently released by the Michigan Treasury takes a look at the financial viability of local governments in their recoveries following the most recent recession.
In the report, the state Treasury Department outlines that through growing revenues and strong financial management by local units of government, general fund balances have increased overall and the number of general fund deficits have decreased.
On the other hand, the improvement is not uniform. The report also highlights the fact there are some entities that have not seen the same level of recovery and continue to face challenges with lower general fund balances and lower property tax values.
“The goal is to provide an honest and factual basis that everyone can use as we discuss local government finance,” State Treasurer Nick Khouri said. “Now is the time to address the long-term challenges that continue to stress local units of government. With a balanced approach, we can mitigate risks and ensure that most of our cities, villages, townships and counties will be resilient to future economic challenges.”
While many local units of government are seeing revenue growth and strengthening finances, the report recommends that entities enact tools for addressing legacy costs, intergovernmental cooperation, efficiency improvements and establishing a stable revenue base.
The report concludes that local units of government will be robust and resilient to a possible future recession, natural disaster or other problem by addressing these future risks.