Provide Local Governments With More Diverse Tax Options
The League’s SaveMICity initiative has long contended that Michigan’s system for funding municipalities is broken and doesn’t track with the economy. In a Detroit News column on that subject, the Citizens Research Council of Michigan (CRC) posed this question: If Michigan is making a comeback after all of the problems we had in the first decade of this century, why isn’t it reflected in robust local government revenues? They conclude that Michigan’s over-reliance on the property tax and the growth limitations we have placed in our state constitution means that tax revenues for most cities and townships only grow at the rate of inflation, even when these good things are happening.
The CRC’s new report – Diversifying Local-Source Revenue Options in Michigan – examines how local governments’ revenue systems in other states benefit from business growth, full employment, consumer purchasing, and tourism. The answer is that other states provide their local governments with far more diverse tax options.