The State of Michiganís Fiscal Year 2012 budget replaces statutory state revenue sharing with a new Economic Vitality Incentive Program that creates incentives for local government reforms. In order to qualify for funding that formerly was automatically distributed based on a statutory formula, local governments will have to comply with requirements related to employee compensation reforms, intergovernmental collaboration for the delivery of services, and new accountability tools. This paper will explain the context within which the new accountability tools -- citizensí guides to financial information and performance dashboards -- were introduced; discuss the stateís guidelines for development of these tools; critique the templates the state has created to provide some guidance to local officials; and recommend the content of performance dashboards and considerations for making the dashboards more meaningful for local governments and their citizens.
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On March 21, 2011, Governor Snyder delivered a message to the legislature concerning local governments. In that message the Governor laid out his vision for reforming the interaction between the state and local governments; identified some reforms of laws that affect local governments; and announced plans to transform the unrestricted state revenue sharing program into an incentive program to push local governments into implementing certain policies.
Some of the reforms identified by the Governor already have been enacted, but others are still winding their way through the legislative process. These reforms include changes to the laws that enable intergovernmental collaboration, the Public Employees Relation Act, and binding arbitration for public safety workers; changes to the Home Rule Cities Act to prohibit minimum staffing requirements in city charters; pension administration reform; and the introduction of laws to fund local governments when mandates are handed down by the state. Many of the changes have been controversial, because they have attempted to increase the ability of local governments to reduce costs by making it easier for them to reduce the pay, benefits, and bargaining rights of local employees.
Economic Vitality Incentive Program
The Economic Vitality Incentive Program (EVIP) statutorily shifts the unrestricted state revenue sharing program to an incentive program through which funding will flow to local governments based on their ability to satisfy certain criteria. One of the intents of EVIP is to create new tools to keep residents better engaged in the operations and financial condition of their local governments.
These requirements only apply to the funds that had formerly been distributed through the statutory state revenue sharing program. The statutory revenue sharing program has been subject to cuts throughout the last decade to the point that less than half of the almost 1,800 cities, villages, and townships in Michigan are expected to get statutory revenue sharing in FY2011. The list of local governments eligible for EVIP funding in FY2012 includes only 486 cities, villages, and townships.
Local governments not eligible for EVIP funding may prepare a citizensí guide and performance dashboard, but there is no current financial incentive to do so. They may see the utility in providing these accountability tools, want to position their governments for future EVIP funding, or react to pressure from their citizens to keep up with neighboring communities. On the other hand, the smaller local governments that are eligible for only the minimal amounts of funding may decide to forgo EVIP funding if the costs of qualifying for the EVIP funding exceed the financial benefits received.
Continue Reading the Report
EVIP Excel spreadsheet overview
F65 Portal Connectivity and the Citizen's Guide