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Education, Municipal, News, Opinion

Cheers to a successful millage passage!

By: Bob Kittle

It was announced at the Detroit Regional Chamber’s Mackinac Policy Conference in May 2019 that a coalition of education advocates is aiming for a Wayne County millage to support after-school programs. If supported, the county-wide proposal would be on the Wayne County ballot in 2020. While this effort may be worthwhile, it is certain to be a challenge, first because it’s a county-wide vote, but also because gaining support for any millage proposal can be difficult – as almost any city or school district can attest. Having accurate and timely data can help build a strong case for millage requests and lessen the handwringing for anxious policymakers at the same time.

Munetrix understands the importance of data in community decision making. Increased demands for transparency make it clear that constituents want confidence that every penny is spent wisely. When current dollars aren’t enough to support operations or a new community initiative, a strong case can be made for additional funding by comparing how similar communities pay for equivalent services. You can also respond to naysayers with data reflecting that proposed millage rates aren’t unprecedented or out of line using relevant comparable analysis.

Citizens expect data to be accessible and will use it to better understand their community’s use of taxpayer funds. While preparing for your next city or school (or, in the case of Wayne County, after-school) millage, use data in your favor.  

Munetrix makes government data easy. If you need assistance with your next millage proposal, don’t hesitate to contact us.

Fiscal Stress, Municipal, News, Opinion

Don’t believe everything you read. But believe this. Many Municipalities are Starving.

By: Bob Kittle

The headline of this March 21, 2019 post, Property Taxes Up $638 Million In 2018, by Michigan Capitol Confidential is eye-catching—and surely stoked the fire of those who believe they pay too much in property taxes—but let’s not let the facts get in the way.

While Michigan property tax collections may be up for the sixth consecutive year, it must be considered that the drop from 2008–2012 was so severe that the increases still haven’t caught up to pre-recession levels. That’s an important piece of information missing from the article, and is caused by the limitations of 1978’s Headlee Tax Amendment to the State’s Constitution, then followed up by 1994’s Proposal A.

To make this easier to understand, I will use an analogy with our retirement savings plans and homes. During the recession, most of us saw a 40–50% drop in the value of our retirement savings, only to see it storm back and exceed where we were initially—if we were patient. Same with housing values. Property owners saw their home values cut in half, and subsequently watched as they stormed back from 2012 to today. In most cases, our property is now worth more than it was worth pre-recession.

But local units of government in Michigan don’t see that appreciation because they are limited to a taxable value increase of CPI or 5% per year, whichever is lower. CPI didn’t exceed 2% until 2017 – so while our 401Ks and home values were rebounding at compounding double digit rates, municipalities had to watch as everybody else got well, but they were (are) handcuffed. In Auburn Hills, where I am a councilperson, our Total Taxable Value is still down $1B from its 2007 level, meaning we must operate on nearly $1M less in property tax revenue when it comes to paying our police and fire personnel, fixing roads and generally running the government.

On top of that, the State fixed their budget by pulling much needed sales tax revenue from local governments to fix their structural deficit. The last straw is that IF a community sees tax increases on certain properties exceed the constitutional limits, the rest of the city’s properties must be reduced by the corresponding value to make sure, on a city-wide basis, the total taxable value doesn’t exceed the allowable limit. The laws never considered a market crash!

Look, Munetrix is in the municipal data business, so we understand the role of data, especially in communicating to constituents. What we don’t like is half-truths, and appreciate when journalists provide balanced stories.

At the end of the day, many communities are cash-strapped and starving, but mostly not by their own actions.

Education, Fiscal Health, Fiscal Stress, Municipal, News, Opinion

Finally, it’s not the economy; unfortunately, it’s still the education void

By: Bob Kittle

If it ain’t one thing, it’s another. Perhaps not the best way to start a blog that is ultimately on education, but as the economy hums along (despite some potentially scary headwinds with the recent GM announcement) education is the nemesis that Michigan (or at least Detroit) can’t seem to conquer.

The Detroit Regional Chamber recently released its 2018-2019 State of the Region providing economic indicators and critical areas of improvement for its 11-county region plus Detroit. The report overall offered an upbeat outlook on the region’s progress in many sectors, but underscored the importance in addressing areas in which the region continues to lag – notably education. In a spot-on Detroit News column by Daniel Howes, the education void is so dark and vast, its challenges may temper many of the positive gains made in the region and the state for recent years.

The good news is that Detroit is outpacing the nation in growth in real gross domestic product (2.7 percent vs. 2.2 percent nationally) and per capita income (4.3 percent compared to 4.1 percent nationally). That can’t be overlooked. Nor can the fact that Detroit was second in the nation in growth of median home values between 2013 and 2017, increasing by 42.4 percent (Seattle was number one). The high cost of living on the East and West Coasts makes Detroit attractive—a plus for companies aiming to boost and cultivate tech talent.

But contradicting these positive indicators are critical areas where Detroit is missing out, notably extreme poverty, low metrics on community well-being, and stagnant population growth. Yet the most pressing issue is the mediocre status of Detroit’s educational attainment—which was actually below the national numbers in 2017.

Education, Fiscal Health, Fiscal Stress, K-12, News

Cities & Schools Reach Crisis Point Due to States’ Low Economic Reserves

A recent article in the Wall Street Journal (Many States Are Unprepared for Next Economic Downturn) caught my attention because it highlighted a key factor adding to the fiscal stress of municipalities and schools.  The article suggested that most states are unprepared for an inevitable economic downturn as they lack the necessary fiscal reserves or rainy-day funds to cushion the next financial blow, and, it’s already having a negative trickle-down effect.

Forced to do more with less since the last recession, cities and schools are continually struggling with reduced revenue sharing from their states while scrambling to meet the demands of unfunded mandates, retiree obligations, an aging infrastructure and even increased student testing. Add this to the anticipated silver tsunami caused by public sector retirements in the next decade, we see a myriad of local governments that are already stretched too thin and have reached a crisis point.

One of the most alarming things noted in the WSJ article was that some states appear to have little sense of urgency and limited tools to address these budgetary shortfalls. Forget crisis point—this dilemma will have far-reaching and long-term consequences for the populations served by those who gloss over the unavoidable hard truth and do nothing about it now.

Fiscal Health, Fiscal Stress, Municipal, News, Opinion

At least for now, Michigan closes the chapter on Emergency Financial Managers

By: Bob Kittle and Katrina Powell

The State of Michigan Department of the Treasury sent out a press release on June 27, 2018 announcing that for the first time in 18 years, neither a school district or municipality in Michigan has an emergency manager. You can read the press release in its entirety here, but following is an excerpt.

“LANSING, Mich. – State Treasurer Nick Khouri today announced that no Michigan municipality or school district is under state financial oversight through an emergency manager for the first time in nearly 18 years. The…announcement comes after releasing Highland Park School District from receivership under the Local Financial Stability and Choice Act. Since 2000, there has been an emergency manager providing financial oversight somewhere in Michigan.”

For many years the Emergency Financial Manager (later changed to Emergency Manager or EM) concept was regularly maligned by some constituents, citing it as an overreach of state government at the loss of local control and racially motivated. The term carpetbagger was bandied about as well. One respected national government trade publication headlined a 2012 article, Emergency Financial Managers: Michigan’s Unwelcome Savior. As local government financial advisors ourselves, (Katrina was the State-appointed City Manager for Hamtramck from 2014 to 2017) we, but especially Katrina, have been on the receiving end of some hurtful and untrue verbal attacks about roles and motives.

Education, News

Michigan Education Finance Study

I was reading the just released Augenblick, Palaich & Associates (APA) report titled, Michigan Education Finance Study, commissioned to them by the Michigan Department of Treasury.   The report suggests that there is inadequacy in funding to Michigan Public Schools.

Really?

My first thought was, “We needed to pay $399,000 of taxpayer money to have somebody from Colorado tell us this in a 224 page report?” That’s $1,781 per page!  This subject has been researched and talked about for years.

So I sent a note to my longtime friend, Eric Lupher, Executive Director of the Citizen’s Research Council of Michigan, a non-profit, non-partisan, 100-year-old think tank, probably the best think tank there is, and I asked him for his opinion.

The reply I received was so special I have to share it with you. As you know, Munetrix tries to put complicated government “things” into a context anybody can understand, and Eric just trumped us with his simplicity to my question about the APA report.

“Think of it (the APA Report) like getting a diagnosis for your car.  You know it isn’t working right. It’s making a strange noise, but you don’t know what’s causing the noise.  You’ve just paid the mechanic certified in automotive technology to figure out the root of the problem.  Now, we as a state have to decide whether we want to pay to get the problem fixed or if we can live with the annoying noise the system is making.  The system functions, but not in an optim148785_503602589682411_301510673_nal way.  We know that more money, better directed, can improve the performance.  But that costs money.  Are we content to eat out a few less times each week?  To live without cable for a while?

You could have trusted your neighbor (someone inside the state) to diagnose the problem, but your wife would dismiss the diagnosis because the neighbor isn’t certified and probably has preconceived notions about the problem.  So you go to an outsider, APA in this case, for the diagnosis.”

Capiche?

Eric Lupher, Executive Director – Citizens Research Council of Michigan

Mr. Lupher – I couldn’t have gotten this one any better than that. I, and anyone else who reads this, thank you for your succinct, analogous explanation.

Bob Kittle, President & CEO, Munetrix LLC

Municipal, News, Opinion

Can Open Checkbooks Promote Transparency In Local Governments and Prevent Theft?

The recent news in the Oakland Press about the City of Oak Park’s former clerk siphoning $433,000 out of the city’s coffers over a 2-year period made me think … would a higher level of transparency by the city have been able to thwart such an incident?

Within the Munetrix toolbox is a Dynamic Check Register that takes the transparency discussion to the next level.  Local governments have the ability to export their vendor accounts payable files directly from their accounting software into a publicly accessible, searchable database.  Some refer to this as “Open Checkbook” but it by itself is only a fraction what it takes to truly be transparent.

Municipal, News, Opinion

Police: Tough and Smart

As Mayor Pro-tem for the City of Auburn Hills, I was fortunate to have the opportunity to address the men and women in uniform at the Annual Police Department Awards Banquet Dinner.  Below are my my remarks.  

I’m honored to have the opportunity to share in this important function with you and your families tonight. I’ll work to keep my comments to a minimum.  When I tried to think up words that best describe my view of what it means to be a police officer, I came up with the following list:

  • Hard Working
  • Smart
  • Caringpolice-hat
  • Transparent
  • Ethical
  • Dedicated

I’m sure I missed a couple, but I’ll take a couple minutes to share how I correlate each of those to your public servitude.

News

Data, or Information

The digital age has made an abundance of data available to “consumers” but it begs the question, “What information does it provide us?”

I recently sat through a presentation on Traffic Crash Results for a local government.  As part of the presentation, there was a comparison of two neighboring communities, one with 22,600 crashes and the other with 22,100 (data). I didn’t know if the lower number was better, or not.

What was missing was the ability to put the numbers into context. How many residents did each local government serve? What was the number of lane miles or geographic square miles each had. And what was the cost associated with this segment of the public safety budget patrolling these assets (data).

Fiscal Health, Fiscal Stress, Municipal, News, Opinion

Local Government Early Warning Indicators

There is no shortage of articles and white papers addressing the topic of “Local Government Early Warning Indicators.” However, very few offer a concise methodology to address the issue; and most don’t draw any meaningful recommendations to address the dynamics local governments face in today’s new normal.

According to an Alison Wiltshire paper, Developing Early Warning Systems: A Checklist, there are four elements of a people-centered Early Warning System. Why people-centered? Because the average person must be able to grasp the concepts of the message heeded. Mathematicians, researchers and academics are not the ones who will be dealing with a fiscal calamity as it unfolds. The concept of “early” indicates that one would want to understand the issue well in advance in order to act proactively.

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