Michigan’s economy is improving. But the suburbs could face the next fiscal crisis.


Michigan’s economy has largely recovered from the Great Recession, but more than 150 communities still face serious long-term financial challenges. The next frontier of money problems?

Suburbs, says Eric Scorsone, Michigan assistant treasurer.

“I guess the next wave of tax problems will be more likely in the suburbs than in the cities,” Scorsone said. As Detroit and other cities rebound, “problems move, they migrate,” Scorsone said.

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His comments came Wednesday at a panel discussion Wednesday at the Center for Michigan’s Solutions Summit in East Lansing. Jill Roof, research associate at the Citizens Research Council of Michigan, and three mayors: Mark Huizenga of Walker, Karen Majewski of Hamtramck and Bill Wild of Westland joined him to discuss issues facing municipalities.

Everyone agrees that there is no one-size-fits-all solution. Roof suggested that state lawmakers give local government units more tax options for their city to consider in order to manage a variety of revenue sources.

“Cities are contained by state law in the revenue they can generate,” Roof said. “There are a lot of options. Some will work for certain areas, some will work better for other areas … But cities cannot diversify their sources of revenue unless the state allows them to.

Huizenga said municipalities should “keep their houses in order” by paying off unfunded debts, minimizing borrowing and encouraging public-private partnerships.

Minimize sureties, pay projects in advance and pay off unfunded debts. He also stressed the importance for cities to be business-friendly in attracting jobs and leveraging public-private partnerships, citing Walker as an example.

“We really worked to try to be open for business. We really had to change the culture to not just say it’s a policy, but to go beyond ”to implement these policies and help businesses grow, said Huizenga, candidate for the campaign. State House.

All agreed unfunded liabilities like pensions are ongoing issues, and Wild said legacy issues are forcing cities to innovate like never before. He said local communities need more help from Lansing.

Wild said it’s important for cities to identify their spending priorities because many cities can’t raise taxes in order to balance their budgets. Local leaders have inherited problems from previous generations and therefore “you see innovation happening at the city level”.

He also said state lawmakers should carefully consider how they assess their own success.

“We have to change the scoreboard in Lansing. It’s not about the number of bills you’ve introduced or passed, ”said US House candidate Wild. “We need to pass bills that really matter, that change our community and our state. “

Hamtramck stepped out of emergency management this month, and Majewski urged state lawmakers to show “funding leadership” on issues such as infrastructure and public transportation which represent huge costs for local governments.

Majewski said that while there are many benefits when cities are removed from emergency management, it is important to address the root cause of Michigan’s funding needs and critically analyze how lawmakers balance the fiscal needs of the state with those of the municipalities.

“We can certainly see things improving, but until we resolve these broader municipal funding issues, a systemic solution to these issues… (emergency management solutions) are still dressings for individual cases and they do not solve the systemic problem. “

She also pleaded for state “financial leadership” on larger infrastructure and transit challenges, which she said represent huge costs for local governments to manage on their own. same.

Ultimately, she said, economic growth is the only lasting solution to cities’ financial problems.

“We are not going to withdraw from these problems,” she said.