The Center for Local, State, and Urban Policy
Fiscal Trends: Financial conditions continue to improve for some local governments, but the improvement is slowing and is not universal Using this same metric of being better or less able to meet financial needs—but looking at all Michigan local governments, not just those in decline—the seven-year MPPS dataset has tracked the sharp economic decline in 2009 and 2010, followed by gradual improvement that first emerged in 2011. These trends generally mirror experiences of cities across the nation, tracked annually in surveys conducted by the National League of Cities.3 The year 2014 was a notable tipping point, when more jurisdictions reported being better able to meet their fiscal needs than being less able to do so compared to the previous year. The 2015 survey finds the trend of improvement continues for the fifth straight year, though the improvement appears to be slowing and is not universal, with still hundreds of jurisdictions across the state reporting fiscal decline from 2014 to 2015.
Figure 3a Percentage of jurisdictions reporting they are better or less able to meet their fiscal needs in current year compared to previous year, 2009-2015
24% 11%
9%
2009
2010
29%
36%
38%
16% 2011
Better able 2012
2013
2014
2015
Less able 34%
29%
24%
20%
48%
52% 61%
Note: responses for “neither better nor less able” and “don’t know” not shown
The trend of improvement that began in 2011 and continues into 2015 is illustrated in Figure 3a. In 2015, nearly twice as many jurisdictions report improvement (38%) compared to those reporting decline (20%). However, the plurality (40%) of jurisdictions report no change from last year, indicating that any rebound may be petering out in many local governments. Figure 3a also shows a flattening of the improvement curve over time. While in previous years the percentage of jurisdictions that reported being better able to meet their fiscal needs increased by at least five percentage points year-to-year, from 2014 to 2015 the MPPS found an improvement of only two percentage points, from 36% in 2014 to 38% in 2015.
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