How Much Did Your City Lose in State’s $6.2 Billion Revenue Sharing Raid?

Gov. Rick Snyder is recommending a 15 percent increase in revenue sharing funding for local communities. Is that enough?

Cities lost $6.2 billion in statutory revenue sharing between 2003-2013, according to a report by the Michigan Municipal League. (Patch file photo)
Cities lost $6.2 billion in statutory revenue sharing between 2003-2013, according to a report by the Michigan Municipal League. (Patch file photo)

Southeast Michigan cities have lost millions of dollars in statutorily required revenue sharing since 2003 as part of a $6.2 billion raid on the fund to plug holes in the state budget.

The Michigan Municipal League, which released the report last month, is sharply critical of what it calls “the Great Revenue Sharing Heist,” and said that when the state changed the rules regarding revenue sharing to address its serious revenue shortfall, the problem was shifted to local communities.

Revenue sharing is a funding stream that local governments have come to count on remaining relatively stable, a cushion against property values that plummeted faster than cities could have anticipated and increasing retirement costs.

When the state took it away, municipalities were thrown into a state of  financial flux, the League said. Some cities have have been able to better manage or entirely avoid current financing crises if they had received the $6.2 billion the state put in its own coffers.

“What is most shocking is the difference those revenue sharing dollars would have made at the local level,” associate director Anthony Minghine wrote in an article blasting the state for Municpal League’s magazine.  “... We now have a record number of communities facing financial emergencies. It’s easy to blame local leaders, but you must consider all the facts. In most cases, communities that currently face large deficits would in contrast have general fund surpluses.”

Minghine opined that state officials “created most, if not all, of the financial emergencies at the local level.”

Bankrupt Detroit was hardest hit, losing out on a whopping $732 million during the decade from 2003-2013. Flint, also under emergency management is on the list, too. By the end of 2014, that city will have lost $54.9 million in promised revenue sharing funds.

Samantha Harkins, the Municipal League’s director of state affairs, said in a statement that Flint the revenue sharing money would have eliminated Flint’s  $19.2 deficit, and allowed the city to pay off  $30 million in bonds and still have a surplus of more than $5 million.

Among 11 Patch towns, Dearborn was ranked ninth among the 23 cities with more than $10 million in revenue sharing losses over the 10-year-period. Dearborn lost lost out on $31.3 million in revenue sharing.

Troy was ranked 12th, with losses of $20.9 million, Farmington Hills 13th with losses of $20.5 million, and St. Clair Shores 14th with losses of $17.3 million.

Affected Patch Communities

  • Birmingham, No. 30: $5.8 million

  • Brighton, No. 41: $2 million

  • Dearborn, No. 9: $31.3 million

  • Farmington Hills, No. 13: $20.5 million

  • Ferndale, No. 24: $9.8 million

  • Grosse Pointe, No. 44: $1.5 million

  • Northville, No. 43: $1.8 million

  • St. Clair Shores, No. 14: $17.3 million

  • Troy, No. 12: $20.9 million

  • Utica, No. 45: $1.4 million

  • Wyandotte: No. 23: $10.6 million

“You can look at pretty much any Michigan community and see where they might be today if the statutory revenue sharing had been fully funded,” Haskins said.

Gov. Rick Snyder says he plans to increase revenue sharing funding by 15 percent next year, MLive/The Lansing News reported earlier this spring.

That’s a good start, the Municipal League said, but that won’t undo years of economic damage after years of shortfalls.

That raises the question:

  • What do you think about the state’s management of revenue sharing funds? Tell us what you think in the comments.

Love the Pointe's May 15, 2014 at 06:43 AM
I am glad that the State has a surplus,however, the fact is the State did balance their budget on the backs of putting the burden on the cities. Cities have spent to much, but so did the State and they should have made the cuts in revenue sharing a little more equitable. They were hiring State Troopers with that money while municipalities were reducing manpower. I am a Snyder supporter, however, this was not handled fairly.
Ian Darling May 15, 2014 at 07:05 AM
understand the cuts started with Granholm. Remember Snyder turned the state around to have the ability to begin to return moneys back to local units of government. And No, I went to a small urban public school .... and received good grades.
Aridog May 15, 2014 at 08:37 AM
It fascinates me how a fund reduction begun under Gov Granholm in 2003 running through 2013 (figures posted) is implied as Gov Snyder's fault? Snyder took office in 2011, so he oversaw 2 years of the 10, and reversed the state deficit at the same time. He now suggests beginning to increase revenue sharing, from a surplus, and he's the bad guy? Laughable. Finally, the simple idea that a State can legitimately run a deficit to underwrite cities is foolish...they can't print money like the Fed (quantitative easing) does, so any distribution of funds not collected will result in debt that has no obligation for payment. Detroit is an example of where that leads. Why yes, I attended a tiny private (parochial) school in the north woods 50+ years ago, then worked full time in trades to go to Wayne State at night for 7+ years. No financial aid you see...also no debt.
Clinton Baller May 15, 2014 at 10:54 AM
Governments aren't people. You don't manage a government's finances the way you manage a family's. Any comparison is dumb. And 2014 isn't 2008. We have ridiculously short memories in America. Does the Great Recession ring any bells? Do you think the repair bill to fix your front end isn't a tax? Do you think double-digit increases in tuition aren't taxes? How 'bout pay to play where phys ed used to be? The list could go on. The stuff we want costs money, whether we pay it directly or through taxation. A government surplus when citizens are starving is no better than a government deficit when our citizens are fed.
Racer Boy May 15, 2014 at 07:23 PM
Actually, "dumb" would be comparing voluntary individual spending with law-enforced government taxation...there is a big difference. One involves personal freedom..the other oppressive government rule. Anyone here actually believe our state would be better off with "Granholm style" leadership?


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