Short-change local governments in Michigan are associated with deteriorating water systems

The other tax change also came due to the Great Recession. Sales taxes are sent to the state and part of it is redistributed to cities, villages and towns. The constitution provides for part of it. A second formula, called the statutory quota, expires when the state budget narrows. Now, instead of sharing that portion of the sales tax, the legislator simply distributes what he wants each year.

“This is actually being funded about $600 million less than it should be every year, and that’s multiplied by billions and billions and billions of dollars over the last decade plus,” Lamakia noted.

In fact, that shortfall rose to $800 million last year because the state was getting a lot more money, but not sharing much of it.

Lamakia said municipalities now have to take into account the spike in inflation, which is currently over eight percent.

“You really have this almost perfect storm of things that take what is already a limited source of revenue and then add these additional burdens and cost increases to it.”

Higher local taxes and fees

The burden has fallen even more on vulnerable populations.

“The problem is that they have to resort to more regressive forms of property taxes, fines, fees and other fees, which are really disproportionately hurting low-income families and our black and brown communities,” said Rachel Richards, Michigan’s director of fiscal policy. Public Policy Association.

Families still pay the same rate of sales tax as the state government, but their communities get less of it. This has resulted in municipalities becoming more dependent on millions. Citizens pay more property taxes, which also leads to higher rents. Local governments apply more fees or raise fees for utilities such as water and sewage. It is an attempt by the local government to keep something close to the same level of service.

Richards said the legislature could give cities more money from its general fund to invest in water infrastructure. The idea is that the money will keep water prices affordable for families and avoid crisis-level situations when it comes to servicing water and sanitation.

Part of the water infrastructure crisis is the lack of political will to pay for it. If an elected official votes to spend the money to improve a park or make township living distinctly better, that earns the respect of voters. Voting to spend money on underground pipes when there is no obvious problem is less likely to win votes. But waiting until there is an obvious problem often leads to a crisis in either a neighborhood or sometimes an entire city.

Get a loan (if you can)

Instead of direct assistance, the state government refers to the renewable loan funds available for both drinking water and wastewater systems. Larger cities are often staffed with engineers and people who know how to complete complex applications. But for smaller towns and villages, this is not a reality.

“We spoke to several communities who said it was just a really difficult application process… just filling out forms and paperwork to actually get to the door and see if you can get that help is a no-brainer for many communities,” Stephanie said. Leiser who works with a regular survey of municipal leaders through the Center for Local, State, and Urban Policy.

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