Opinion: Time to invest in our cities

Melanie Piana

There is a common theme running through the minds of the people managing the finances of our state’s cities, towns and counties: We can’t go on like this much longer.

Michigan’s local communities are being hit hard by a state funding system that is fundamentally flawed. While belt-tightening and penny-pinching have kept most communities from going bankrupt, there is only so much we can cut. We all need action from Lansing.

The problem is a systemic one. Local municipalities have only two sources of financing — revenue sharing from the state and property taxes for local homeowners and business owners.

At the heart of the matter is that revenue sharing has not kept pace with the basic needs of local communities. Since 2002, more than $8.6 billion in taxes collected from residents have been directed away from the services our cities and villages provide and toward plugging budget holes in state government.

That number is as big as it sounds, and it is damaging for our communities. According to U.S. Census data, Michigan is the only state in the nation that has experienced negative growth in municipal investment since 2002. In other words, we are dead last. And it is not even close. Our neighbor to the south, Ohio, is 49th on that list and their municipal investment has grown by over 25 percent over the same period.

There is no corner of Michigan that has not been affected by this, including right here in Ferndale. Since 2002, nearly $18 million has been redirected to state priorities away from the basic needs of our community like police protection and road repair. Those are your tax dollars and they should have stayed right here in Southeast Michigan and gone toward funding the local services we all value.

In addition to revenue sharing, local property taxes are the other primary source of investment to fund critical local services, and that, too, has not kept pace with growth.

When recession hits, the taxable values of our homes and business can plunge overnight. But when our economy recovers, municipalities remain stuck collecting the lower rate of property taxes due to laws that limit tax increases to the rate of inflation. As a result, municipalities across the state are still being funded at levels near the lows of the Great Recession — and will be for years to come. We need a new way forward.

For years, local community leaders have been working within the realities of Michigan’s funding system and doing their best to make do with less, but the lack of investment has reached a critical point. We all see it in the crumbling roads, overgrown parks and increased emergency response times impacting communities across the state. Our ability to create and sustain the kind of strong communities that have the power to invigorate and drive our state forward is a critical challenge for all of us at all levels of government.

Piana writes: "Michigan’s local communities are being hit hard by a state funding system that is fundamentally flawed."

Finding solutions to these problems is the aim of the SaveMICity initiative that is gaining traction in cities and towns across the state. We need new ideas, innovative approaches and bold action if we hope to create the kind of communities — and Michigan — we all want and deserve.

Melanie Piana is a councilwoman for the city of Ferndale.