Statewide Trends in Local Government Finances

Transcription

1 Statewide Trends in Local Government Finances Oakland County City Managers Association December 8, 2015 Eric Lupher / elupher@crcmich.org

2 Citizens Research Council of Michigan Founded in 1916 Statewide Nonpartisan Private not-for-profit Promotes sound policy for state and local governments through factual research Relies on charitable contributions from Michigan foundations, businesses, organizations, and individuals 2

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4 Statewide Property Values Appear to be Rebounding $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $ SEV TV 4

5 Inflation Adjusted Taxable Value $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $ SEV TV 5

6 Statewide Property Tax Revenues $16,000 $14, Dollars Nominal Dollars $12,000 (millions of dollars) $10,000 $8,000 $6,000 $4,000 $2,000 $- Calendar Year 6

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8 It s not your fault. It s not your fault! and You re not alone 8

9 Michigan has many local governments with very few people within them

10 Regional Share of Aggregate State Taxable Value in 2015 Region 1 3% Region 2 6% Region 3 3% Region 10 36% Region 4 16% Region 9 11% Region 8 9% Region 7 4% Region 6 7% Region 5 5% 10

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12 Inflation-Adjusted Regional Aggregate Taxable Value Trends by Property Class from 2000 to 2015 Region 1 (U.P.) Region 2 (Upper West LP) Region 3 (Upper East LP) Region 4 (West) Region 5 (Upper Mid-Mich.) Region 6 (Thumb) Region 7 (Lower Mid- Mich.) Region 8 (South- West) Region 9 (South- East) Region 10 (Metro- Detroit) Agriculture -10% -23% -18% +6% +6% +2% +7% +8% 0% -35% Residential +41% +37% +17% +20% +6% -8% +7% +23% +16% -14% Commercial +23% +17% -2% +13% +13% -10% +4% +9% +20% -8% Industrial +1% -19% -27% -24% -21% -40% -5% -2% -40% -42% Developmental +107% -57% -67% -77% -87% -87% -32% -83% -64% -89% Total Real +33% +31% +11% +15% +5% -10% +6% +18% +10% -15% Total Personal Property -2% -6% -12% +2% -21% +7% -3% +25% -11% -36% Total Real and Personal +28% +28% +8% +13% 0% -8% +5% +19% +8% -17% 12

13 Inflation-Adjusted Regional Aggregate Taxable Value Trends by Property Class from 2007 to 2015 Region 1 (U.P.) Region 2 (Upper West LP) Region 3 (Upper East LP) Region 4 (West) Region 5 (Upper Mid-Mich.) Region 6 (Thumb) Region 7 (Lower Mid-Mich.) Region 8 (South- West) Region 9 (South- East) Region 10 (Metro- Detroit) Agriculture +7% +3% -4% +5% +6% +2% +4% +7% +3% -7% Residential +6% -7% -12% -11% -15% -30% -19% -7% -19% -33% Commercial +7% -13% -21% -12% -7% -27% -19% -13% -10% -24% Industrial 0% -20% -29% -33% -55% -38% -10% -15% -38% -50% Developmental -33% 0% -45% -69% -88% -86% -49% -81% -72% -79% Total Real +6% -7% -14% -12% -6% -28% -18% -8% -19% -33% Total Personal Property Total Real and Personal +3% -2% +2% +11% +31% +31% +7% +24% -9% -18% +6% -7% -12% -11% -12% -24% -16% -4% -18% -32% 13

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15 Change in TV in Oakland County Townships, 2000 to 2000 Oakland Townships, Total Real and Personal ADDISON TWP. BLOOMFIELD TWP. BRANDON TWP. COMMERCE TWP. GROVELAND TWP. HIGHLAND TWP. HOLLY TWP. INDEPENDENCE TWP. LYON TWP. MILFORD TWP. NOVI TWP. OAKLAND TWP. ORION TWP. OXFORD TWP. ROSE TWP. ROYAL OAK TWP. SOUTHFIELD TWP. SPRINGFIELD TWP. WATERFORD TWP. WEST BLOOMFIELD TWP. WHITE LAKE TWP. -80% -60% -40% -20% 0% 20% 40% 60% 80% 19

16 Change in TV in Oakland County Cities, 2000 to 2000 Oakland Cities, Total Real and Personal AUBURN HILLS BERKLEY BIRMINGHAM BLOOMFIELD HILLS CLARKSTON CLAWSON FARMINGTON FARMINGTON HILLS FERNDALE HAZEL PARK HUNTINGTON WOODS KEEGO HARBOR LAKE ANGELUS LATHRUP VILLAGE MADISON HEIGHTS NORTHVILLE NOVI OAK PARK ORCHARD LAKE PLEASANT RIDGE PONTIAC ROCHESTER ROCHESTER HILLS ROYAL OAK SOUTH LYON SOUTHFIELD SYLVAN LAKE TROY WALLED LAKE WIXOM -80% -60% -40% -20% 0% 20% 40% 60% 80% 20

17 Change in Residential TV in Oakland County Townships, 2000 to 2015 Oakland Townships, Residential ADDISON TWP. BLOOMFIELD TWP. BRANDON TWP. COMMERCE TWP. GROVELAND TWP. HIGHLAND TWP. HOLLY TWP. INDEPENDENCE TWP. LYON TWP. MILFORD TWP. NOVI TWP. OAKLAND TWP. ORION TWP. OXFORD TWP. ROSE TWP. ROYAL OAK TWP. SOUTHFIELD TWP. SPRINGFIELD TWP. WATERFORD TWP. WEST BLOOMFIELD TWP. WHITE LAKE TWP. -40% -20% 0% 20% 40% 60% 80% 100% 21

18 Change in Residential TV in Oakland County Cities, 2000 to 2015 Oakland Cities, Residential AUBURN HILLS BERKLEY BIRMINGHAM BLOOMFIELD HILLS CLARKSTON CLAWSON FARMINGTON FARMINGTON HILLS FERNDALE HAZEL PARK HUNTINGTON WOODS KEEGO HARBOR LAKE ANGELUS LATHRUP VILLAGE MADISON HEIGHTS NORTHVILLE NOVI OAK PARK ORCHARD LAKE PLEASANT RIDGE PONTIAC ROCHESTER ROCHESTER HILLS ROYAL OAK SOUTH LYON SOUTHFIELD SYLVAN LAKE TROY WALLED LAKE WIXOM -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 22

19 Change in Commercial TV in Oakland County Townships, 2000 to 2015 Oakland Townships, Commercial ADDISON TWP. BLOOMFIELD TWP. BRANDON TWP. COMMERCE TWP. GROVELAND TWP. HIGHLAND TWP. HOLLY TWP. INDEPENDENCE TWP. LYON TWP. MILFORD TWP. NOVI TWP. OAKLAND TWP. ORION TWP. OXFORD TWP. ROSE TWP. ROYAL OAK TWP. SOUTHFIELD TWP. SPRINGFIELD TWP. WATERFORD TWP. WEST BLOOMFIELD TWP. WHITE LAKE TWP. -100% -50% 0% 50% 100% 150% 200% 250% 23

20 Change in Commercial TV in Oakland County Cities, 2000 to 2000 Oakland Cities, Commercial AUBURN HILLS BERKLEY BIRMINGHAM BLOOMFIELD HILLS CLARKSTON CLAWSON FARMINGTON FARMINGTON HILLS FERNDALE HAZEL PARK HUNTINGTON WOODS KEEGO HARBOR LAKE ANGELUS LATHRUP VILLAGE MADISON HEIGHTS NORTHVILLE NOVI OAK PARK ORCHARD LAKE PLEASANT RIDGE PONTIAC ROCHESTER ROCHESTER HILLS ROYAL OAK SOUTH LYON SOUTHFIELD SYLVAN LAKE TROY WALLED LAKE WIXOM -60% -40% -20% 0% 20% 40% 60% 80% 100% 24

21 Change in Industrial TV in Oakland County Townships, 2000 to 2000 Oakland Townships, Industrial ADDISON TWP. BLOOMFIELD TWP. BRANDON TWP. COMMERCE TWP. GROVELAND TWP. HIGHLAND TWP. HOLLY TWP. INDEPENDENCE TWP. LYON TWP. MILFORD TWP. NOVI TWP. OAKLAND TWP. ORION TWP. OXFORD TWP. ROSE TWP. ROYAL OAK TWP. SOUTHFIELD TWP. SPRINGFIELD TWP. WATERFORD TWP. WEST BLOOMFIELD TWP. WHITE LAKE TWP. -150% -100% -50% 0% 50% 100% 150% 25

22 Change in Industrial TV in Oakland County Cities, 2000 to 2000 Oakland Cities, Industrial AUBURN HILLS BERKLEY BIRMINGHAM BLOOMFIELD HILLS CLARKSTON CLAWSON FARMINGTON FARMINGTON HILLS FERNDALE HAZEL PARK HUNTINGTON WOODS KEEGO HARBOR LAKE ANGELUS LATHRUP VILLAGE MADISON HEIGHTS NORTHVILLE NOVI OAK PARK ORCHARD LAKE PLEASANT RIDGE PONTIAC ROCHESTER ROCHESTER HILLS ROYAL OAK SOUTH LYON SOUTHFIELD SYLVAN LAKE TROY WALLED LAKE WIXOM -100% -80% -60% -40% -20% 0% 20% 40% 26

23 Change in TV in Wayne County Townships, 2000 to 2000 Northern & East Wayne, Total Real and Personal ALLEN PARK CANTON TWP. DEARBORN DEARBORN HEIGHTS DETROIT GARDEN CITY GIBRALTER GROSSE POINTE FARMS GROSSE POINTE PARK GROSSE POINTE SHORES GROSSE POINTE WOODS HAMTRAMCK HARPER WOODS HIGHLAND PARK INKSTER LIVONIA NORTHVILLE NORTHVILLE TWP. PLYMOUTH PLYMOUTH TWP. REDFORD TWP. WAYNE WESTLAND

24 Change in TV in Wayne County Townships, 2000 to 2000 Southern & West Wayne, Total Real and Personal BELLEVILLE BROWNSTOWN TWP. ECORSE FLAT ROCK GROSS ISLE TWP. GROSSE POINTE HURON TWP. LINCOLN PARK MELVINDALE RIVER ROUGE RIVERVIEW ROCKWOOD ROMULUS SOUTHGATE SUMPTER TWP. TAYLOR TRENTON VAN BUREN TWP. WOODHAVEN WYANDOTTE -40% -30% -20% -10% 0% 10% 20% 30% 40% 28

25 Trends in Private Sector, State Government, and Local Government Employment Percent Change From Start of Receission (March 2001) 10% 5% 0% -5% -10% -15% -20% -25% Private Sector State Government Local Government 29

26 Monthly Public Sector Employment by Sub-Sector in Michigan: 12-Month Rolling Average since March % Percent Change From Start of Recession (March 2001) 20% 10% 0% -10% -20% -30% -40% Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 State & Local - Higher Education Local - K-12 Education State - Non-Education Local - Non-Education 30

27 What do we do? 31

28 1. Fix Property Tax 32

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30 Key Points in MSU Report Municipal fiscal distress is not simply a local problem. State laws and policies provide extraordinary influence over the ability to balance revenues and expenditures. Some states incubate local financial stress by driving up spending pressures on their cities while curtailing their capacity to raise critical revenue. Michigan incubates financial stress among its local governments. Creating a state agency that coordinates services to local governments and offers technical support and fiscal monitoring. Raising awareness among citizens and state decision makers that the causes of fiscal distress are not solely at the local level. 34

31 Reform State Revenue Sharing 35

32 2008 Revenues from State Aid Source: National League of Cities, Cities and State Fiscal Structure

33 2014 Revenues from State Aid Source: National League of Cities, Cities and State Fiscal Structure 2015, 37

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35 Constitutional State Revenue Sharing $2,000 $1,800 $1,600 (Millions of Dollars) $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Series1 39

36 Statutory State Revenue Sharing $2,000 $1,800 $1,600 (Millions of Dollars) $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Series2 40

37 Statutory Revenue Sharing, Actual and Statutory Reduction $2,000 $1,800 $1,600 (Millions of Dollars) $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Constitutional Statutory Unfunded 41

38 Why do we have local government? CRC s answer: To manage the interaction between people. To protect/serve properties within each jurisdiction. Do you have a different response? 42

39 What is the state s interest in an effective provision of local government services? CRC s answers: Local government hosts people and businesses upon which state taxes are levied. Local governments provide services for the health and safety of Michigan residents and guests. Do you have a different response? 43

40 Taxable Value per Capita 44

41 Population Density 45

42 Plotting Revenue Raising Abilities against Service Demands 46

43 Authorize Additional Local-Option Taxes 47

44 NLC Municipal Fiscal Authority Source: National League of Cities, Cities and State Fiscal Structure 2015, 48

45 CRC adapted NLC map Municipal Fiscal Authority Source: National League of Cities, Cities and State Fiscal Structure 2015, 49

46 Authorization to Levy Property Taxes 50

47 Authorization to Levy Local-Option Income Taxes Cities Only 51

48 Authorization to Levy Local-Option General Sales Taxes 52

49 Authorization to Levy Local-Option Motor Fuel Taxes 53

50 Authorization to Levy Local-Option Motor Vehicle License Taxes 54

51 Authorization to Levy Local-Option Alcoholic Beverages Sales Taxes 55

52 Authorization to Levy Local-Option Tobacco Sales Taxes 56

53 Authorization to Levy Local-Option Public Utility Sales Taxes Detroit Only 57

54 2008 Revenues from Own-Source Capacity Source: National League of Cities, Cities and State Fiscal Structure

55 2014 Revenues from Own-Source Capacity 59 Source: National League of Cities, Cities and State Fiscal Structure 2015,

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