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    November 18, 2014

    2011 Media Citations

    The media recognize that without a trusted, independent source of data and analysis, the flow of information about state and local government issues would be controlled by two sources — the governmental units themselves and interest groups. CRC is that trusted source. Here are the latest articles in which CRC is cited:

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    “There were lot of reforms that were a long time coming,” said Craig Thiel, director of state affairs for the Citizens Research Council of Michigan, a think tank that offers nonpartisan, research-based analyses of state policies.

    “The changes this year in education were as broad-based and far-reaching as anything we’ve seen in a long time,” Thiel said. They weren’t changes on the periphery, but in core areas, he said, led by a governor intent on reinventing Michigan and a Republican Legislature willing to butt heads with the K-12 establishment.
    “One story this year was that the state was willing to be the bogeyman” on initiatives that have meet with fierce resistance in the K-12 community, such as forcing school employees to contribute more toward health insurances, Thiel said.
    “These are things that local schools have never tried to do or tried to do and threw up their hands in frustration. This year, the state came in and just did it,” he said.

    The nonpartisan Citizens Research Council concluded in a July report that the business tax cut likely will have a positive effect on business investment and Michigan’s reputation in the business community. But it sees potential pitfalls as individuals pick up the tab through higher income tax payments, reducing their ability to spend in ways that would spur the economy.

    “Because of the offsetting nature of these effects, any overall effect on growth, positive or negative, is likely to be small,” the report concluded.

    Jeffrey Guilfoyle, president of the Citizens Research Council, studied Detroit’s finances earlier this month and pegged unfunded retirement and debt costs at $14.1 billion, equaling $20,000 per city resident.

    “It’s pretty clear that they’re in a dire situation,” he said. “They’re not putting any money aside for future retirees. That is a real millstone around the city’s neck.”

    In fact, House Bill 4936 does not prevent people from changing state law through a ballot initiative. According to the Citizens Research Council, the people of Michigan can “propose laws and enact and reject laws.” The power of initiative extends to any law the Legislature may enact and is invoked by filing petitions containing signatures of registered voters equal in number to at least 8 percent of the total votes cast in the last election for governor.

    Eric Lupher, director of local affairs for the nonpartisan Citizens Research Council of Michigan, said that the impact of these changes is likely to be political, not legal.

    “The reality is that the law (the Urban Cooperation Act) appeared to create the illusion that (local governments) had to round up or pay the higher salary (when merging two public service agencies). It didn’t say that,” Lupher said. “Local governments used that as an excuse.”
    Lupher was quick to add, however, that there’s a fair amount of service cooperation going on in Michigan now — and that by making it more clear that local governments are not locked into higher pay scales, the changes may propel action in at least one region of the state.
    “Part of the charge (for the bills) was from some of the Grand Rapids communities. They seriously are interested in cooperating. They found that the illusion was getting in the way,” Lupher said. “Grand Rapids, Walker, Kentwood, other communities — they are collaborating much more than anywhere else in the state and have ideas on more collaboration.”

    The Citizens Research Council of Michigan estimates that in addition to the short-term budget deficit, the city owes $1.5 billion on bonds it has issued to keep its pension systems funded. To make matters worse, it has $5 billion in other unfunded liabilities for retirement benefits for city workers.

    The city owes bondholders, workers, retirees and others more than $14 billion, according to the Citizens Research Council of Michigan, a public policy group.

    But what’s the real story? What took my breath away was a report last week from the non-partisan, non-profit Citizens Research Council of Michigan. It revealed that apart from the current budget deficit, the city owes one point five billion dollars in principal debt on certificates it issued to keep its pension systems funded.

    “Public Act 4 is Public Act 72 on steroids,” said Bettie Buss, a senior research associate at public policy group Citizens Research Council of Michigan, which has analyzed the new law. “It makes it very clear the emergency manager has operational responsibilities as well as financial responsibilities.”

    “Any credible deficit elimination plan must incorporate a means to resolve the city’s future liabilities,” the Citizens Research Council of Michigan says in a new report entitled “Legacy Costs and Indebtedness of the City of Detroit.” It continues: “Without major structural changes, limited tax debt, pensions and other post-employment benefits will continue to absorb increasing amounts of the general fund, leaving less and less for essential public services.”

    A recent report from the Citizens Research Council of Michigan highlights a sometimes overlooked part of Detroit’s current fiscal crisis: the city’s debt and legacy costs.

    “It’s 7% of the population of Michigan,” said Jeff Guilfoyle, president of the Citizens Research Council of Michigan and a former top official in the state Treasury Department. “It’s 7% of our future work force being educated in the city’s schools. The city’s future affects the state’s future. And the city’s financial situation, its credit rating, weighs on everybody’s credit rating.”

    If the credit markets determine that Detroit’s fiscal problems have not been adequately dealt with, it will affect how they view the state as a whole. “This is uncharted territory,” noted Craig Thiel, state affairs director for the Citizens Research Council. The state’s or other municipalities’ bond ratings might not immediately be downgraded, but they may have to “jump through more hoops” to float debt.

    A new report from the nonpartisan Citizens Research Council of Michigan takes an exhaustive look at Detroit’s legacy costs — pension and health care obligations to retirees and bond debt — measures them against current and projected revenues and concludes that “as Detroit’s fiscal situation deteriorates, questions may arise as to the city’s ability to service its debt.”

    Structurally balancing Detroit’s $3.1 billion budget will be no easy task given the city owes bondholders, retirees and others more than $14.1 billion, according to a report released on Thursday by public policy group Citizens Research Council of Michigan.

    A new report from the Citizens Research Council of Michigan paints a stark picture of Detroit’s long-term financial obligations.

    While the full report has not yet been delivered, data gathered by the Citizens Research Council of Michiganand students from the University of Michigan Gerald R. Ford School of Public Policy was presented Nov. 9, along with recommendations. Researchers began collecting the data in spring 2010.

    The Citizens Research Council, a nonpartisan group that studies government at all levels, analyzed Detroit’s finances in 2010 and warned that the city “must be restructured.” The city, it noted, owns a small airport, has its own health service, regional water agency and streetlight department, and uses city employees, not contractors, to pick up trash.

     What we have right now is a really complicated system. If we were to pick a time to fix it, this would be a great time,  said Eric Lupher, director of local affairs at the nonpartisan Citizens Research Council of Michigan.

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    Individual tax bills vary, of course. But whether or not they realize it, Michigan property owners have benefited from property tax relief for years, said Craig Thiel, director of state affairs at the Citizens Research Council of Michigan.

    Proposal A, passed by voters in 1994, limited annual increases in the taxable value of property to the rate of inflation or 5 percent, whichever is less.
    The net effect of Proposal A for homeowners has been a tax cut because it limited the rise in taxable values of property during years when market values were rising faster than the Proposal A cap, Thiel said.
    “Now we’re enjoying lower property taxes because the value of the asset is declining,” he said. “Now you see it in your wallet.”
    But the impact of that tax cut has been minimized for a variety of reasons. For many taxpayers, the cut in their property tax bills and declining incomes have “canceled each other out,” Thiel said.

    Instead of imposing an outside manager on the city, the governor could enter into a consent agreement that gives local officials many of the expanded powers of an emergency manager. The city would have to provide a written plan of action and then abide by it. The one big difference between that approach and the imposition of an emergency manager, explains analyst Bettie Buss of the nonprofit Citizens Research Council, is that, even under a consent agreement, the city wouldn’t have the power to void established union contracts. However, once those contracts do expire, the city would have the authority to unilaterally set wage and benefit levels without having to negotiate with the unions.

    Detroit is one of 22 cities in the state with a corporate income tax, according to a January report by the nonpartisan Citizens’ Research Council. According to that report, the City Council can increase the tax rate — but the rate is capped at 1 percent.

    One possible solution may come from Eastern Michigan University and the Citizens’ Research Council, which have established a graduate level class to examine the distribution of constitutional revenue sharing for next year.

    The Citizens Research Council found that in 2006, the formula resulted in a distribution of state road funds at a rate of $270 per resident in low-population Baraga County in the Upper Peninsula, while populous Wayne County received the equivalent of $89 per resident. Engler sought a formula revision that would distribute the funding more efficiently, but it was defeated in the Legislature.

    With Gov. Rick SNYDER and others talking about dumping the 19-cent per-gallon gas tax in favor of a wholesale-price based tax, the researchers at the Citizens Research Council of Michigan have added some data to the unfolding debate and the conclusion is clear.

    The nonpartisan Citizens Research Council ran the numbers in a special report this month: If Michigan had been taxing gasoline at the wholesale price (as proposed by Governor Snyder)…

    Detroit warned investors about the risk of a Chapter 9 bankruptcy in a preliminary official statement for a $250 million debt offering in March 2010. The Citizens Research Council of Michigan said a month later that the city might have to resolve its fiscal problems by filing for Chapter 9 or appointing an emergency manager.

    Eric Lupher is with the Citizens Research Council of Michigan. He says people living in Jackson, and other cities, have to come to terms with local governments that can no longer provide services they’re gotten used to.

    These are all important changes and should be retained in a revised charter proposal or amendments to the current charter. The creation of the new office of inspector general to police corruption, however, as an analysis by the Citizens Research Council notes, could create duplication and confusion with a strengthened ethics board and the office of city auditor general.

    The proposed charter will not significantly change the economic or financial path the city is on the Citizens Research Council of Michigan concluded in its analysis of the document.

    The Michigan Citizens Research Council in 2008 analyzed the effect of the road funding formula — which favors funding based on miles of road rather than on how heavily those roads are used. As a result, it found that in 2006 the formula’s distribution of funds to local and county road agencies in rural Baraga County in the Upper Peninsula amounted to $270 for each county resident. The equivalent for Wayne County residents was about $89.

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    Panel members of the forum consisted of three charter commissioners, along with City Council Research and Analysis Division’s LaKisha Barclift and Citizens Research Council’s Bettie Buss. Former mayoral candidate Tom Barrow also sat on the panel representing the Citizen’s for Detroit’s Future organization, which has lobbied vehemently for a “no” vote on the revised charter.

    The Citizens Research Council of Michigan — a privately funded, nonpartisan public affairs research organization — also weighed in, saying the proposal does a lot to rid the city of corruption but little to give a framework for economic growth and job creation.

    “It will very probably not significantly change the economic or financial path the city is on,” said Jeffrey Guifoyle, president of the citizens council.

    Eric Lupher, director of local affairs for the Citizens Research Council of Michigan, said municipalities have been doing all they can to reshape how they operate.

    “They’ve been doing what most rational managers can do.
    They’ve been not filling positions when they can get by with it, taking furlough days, operating four days a week,” he said. “This whole rate recession, or minidepression, is causing a rethinking of what local governments should be doing.
    “It’s not treading water until things turn around, it’s reshaping and rethinking what you do.”

    Radio Interview

    “There is a recognition that they can’t depend on state revenue sharing anymore, but when everything else is collapsing around you and your tax base is down 20 to 30 percent, it’s hard to say you should just forget revenue sharing,” said Eric Lupher, director of local affairs for the Citizens Research Council of Michigan, an independent government watchdog. “You need to pay the bills. If it’s available this year, you take it. You worry about next year, next year.”

    “It’s hard to compare what Macomb is doing (with its new government structure) with what came before,” said Betty Buss, senior research associate for the Citizens Research Council in Livonia. The group is a privately funded, nonprofit public affairs research organization.

    The change is “being done while every county and every community is in uncharted economic territory,” she said.

    But going back is not an option, and even if a trip through the rear view mirror were possible the journey would have a devastating impact on the state’s poorest school districts. Granted, Proposal A, the state Constitutional Amendment approved by voters in 1994 that was touted as a plan to equalize school funding, has fallen short of its goal. But to some extent, it has lowered the spread in school funding between Michigan’s richest and poorest districts, according to the non-profit Citizens Research Council. The difference in 1995 was $6,300 per pupil; it was about $5,000 per pupil in 2010.

    Voters who want to learn more about the three ballot proposals to be decided in the Nov. 8 election can watch a League of Women Voters forum on the topics on CDTV, the city of Dearborn’s official television channel.

    The forum also includes a presentation by Eric Lupher, director of local affairs for the Citizens Research Council of Michigan, who gave a general presentation and addressed questions about Civil Service Systems.

    Citizens Research Council issues Onekama government merger report ONEKAMA — The Citizens Research Council (CRC) of Michigan has released a report that will help the Village of Onekama, Onekama Township and other local governments consider the possibilities of merging governments.

    Still, some governments are reconsidering this benefit. Michigan State University stopped offering this benefit in 2010. Bloomfield Township recently voted to cap its costs to provide it. Indeed, a report from the Citizens Research Council found that 39 county governments do not offer this benefit and that nine counties had stopped offering this benefit in the past five years.

    The Citizens Research Council (CRC) of Michigan has released a report that will help the Village of Onekama, Onekama Township and other local governments consider the possibilities of merging governments. The report is entitled “The Costs, Benefits and Alternatives for Consolidating the Onekama Governments”.

    He made that calculation based on a recent Citizens Research Council of Michigan report that states a 1 percent increase in sales tax equates to roughly $1 billion annually.

    And that promptness, said Citizens Research Council Director of Local Affairs Eric Lupher, is something generally applauded by city employees and department heads alike.

    “Civil service systems have never been beloved either by management or by labor,” said Lupher, who came to the Oct. 4 forum to provide an unbiased history of civil service. “Management sees them as getting in the way with regulations or rules. Labor often sees them as management.”
    Lupher and Walling both said that in their research, they couldn’t find many–if any–comparable cities in Michigan still using civil service commissions. Murphy-Goodrich, however, named off several–including Livonia, Westland, Royal Oak, Lansing and Dearborn Heights.

    During the forum, Eric Lupher from the Citizens Research Council explained the history behind civil service commissions.

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    The other day, suitably fitted with required jacket and necktie, I made my way to the Detroit Athletic Club for the 95th annual meeting of one of the best-respected and least-known institutions in our state — the Citizens Research Council (www.crcmich.org) of Michigan.

    The other day, suitably fitted with required jacket and necktie, I made my way to the Detroit Athletic Club for the 95th annual meeting of the best-respected — and least-known — institutions in our state: the Citizens Research Council of Michigan.

    Proponents of tax reform have said doing so would make Michigan more business-friendly, which would increase hiring and bolster the state’s economy. A July report from the nonpartisan Citizens Research Council said the impact would likely be negligible. Others have said schools could make up for the cuts by asking more from their employees.

    The tax is levied on the value of what the law euphemistically calls personal property. According to the nonpartisan Citizens Research Council of Michigan, that includes most business equipment, furniture and fixtures used by business, as well as oil pipelines, and electric and gas transmission and distribution equipment.

    According to the Citizens Research Council for Michigan, the national real GDP for metro areas was up 15.7 percent between 2001 and 2010, almost double the decade’s results for mid-Michigan.

    A recent evaluation by the Citizens Research Council of Michigan concluded “reduced business taxation on its own is likely to yield positive economic growth however this will be offset, at least in part, by the negative economic growth that accompany higher income taxes through reductions in disposable income. Any net effect, positive or negative, is likely to be small”.

    Snyder did not see fit to comply with a plan laid out in a March 2011 symposium that would cut $500 million from the prison budget. The symposium, “Finding the Path to a $1.5 Billion Corrections Budget,” was not a gathering of wild-eyed radicals, but instead a joint effort of the generally conservative Citizens Research Council, the Center for Michigan, and the Citizens Alliance on Prisons and Public Spending.

    Cusimano blamed Detroit, saying the taxes on his properties weren’t realistically assessed and he had to buy them back for his business to survive. Detroit’s tax rates — 65 mills for homeowners and 83 mills on other property owners — are the highest in the state, according to the Citizens Research Council of Michigan.

    If you walk through your child’s school this week, you might see a few empty seats in the classrooms. School enrollment in Michigan has fallen in the last generation.

    That’s the picture from the Citizens Research Council of Michigan. A new report concludes that three of five school districts had fewer students in 2009 than in 1995.

    Detroit’s tax rates — 65 mills for homeowners and 83 mills on other property owners — are the highest in the state, according to a recent Citizens Research Council of Michigan report. The average statewide rate is 31 mills for homeowners and 48 mills for other property owners.

    Since every local government that hopes to get state payments must create its own dashboard outlining what it spends money on and how it is doing, the Citizens Research Council has issued a report providing some guidance on executing that task. And the CRC report is somewhat critical of some of the models the state has provided local governments with to help with that task.

    Nearly 61 percent of the state’s 551 traditional public school districts faced some degree of declining enrollment between the 1995 and 2009 fiscal years, according to a recent report from the nonpartisan Citizens Research Council of Michigan. Data provided by the Senate Fiscal Agency indicates the overall public school enrollment dip has since continued and could extend into 2012-13. It has severe financial consequences, since much of Michigan’s education funding is based on how many students are enrolled in a district.

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    Whether that’s true or not, that there is a major crisis – and coincidentally, a major new report finally gets to the bottom of just why this is. There are few institutions more respected than the non-partisan, non-profit Citizens Research Council of Michigan, whose motto is this: The right to criticize government is also an obligation to know what you are talking about.

    Policy-makers have to decide their intent before they begin making changes to the state’s primary method for funding schools, the Citizens Research Council said in a paper released Monday.

    About 61% of Michigan’s 551 traditional public school districts faced some degree of declining enrollment between the state’s 1995 and 2009 fiscal years. That’s according to a report Monday from the nonpartisan Citizens Research Council of Michigan.

    The work group should have representation from such parties as manufacturers, the Michigan Municipal League, Citizens Research Council, Metropolitan Affairs Coalition and fiscal analysts from both political parties.

    With cities having limited options to address shortfalls, Eric Lupher of the Citizens Research Council of Michigan, said cities often turn toward cutting public safety. He said communities throughout the United States are reducing costs through such cuts.

    Any benefits from the business tax cuts won’t be felt until next year, according to the nonpartisan Citizens Research Council‘s report. It expects the tax cuts will have a positive effect on business investment in 2012 and perhaps new jobs. But the compensating increase in individual income tax payments might reduce spending that could have boosted the economy.

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    Q. The Citizens Research Council’s new review of the budget and tax changes says reducing business taxes will produce positive economic growth that will be offset, at least in part, by the negative economic growth that accompanies higher income taxes. Agree or disagree. And why?

    Q. The Citizens Research Council’s new review of the budget and tax changes says reducing business taxes will produce positive economic growth that will be offset, at least in part, by the negative economic growth that accompanies higher income taxes. Agree or disagree? And why?

    “The higher income tax collections will reduce disposable income for Michigan taxpayers,” the Citizens Research Council report said. “Lower disposable income will result in reduced consumption, a net negative for economic growth.”

    The nonpartisan Citizens Research Council‘s report says it expects a business tax cut will have a positive effect on business investment and Michigan’s reputation in the business community. But it sees potential pitfalls as individuals pick up the tab for higher income tax payments, reducing their ability to spend in ways that would spur the economy.

    “The resolution of the legal questions surrounding the income tax changes could have a significant revenue impact on the state’s fiscal plan and could require policymakers to find alternative revenues or enact further appropriation reductions to maintain budget balance,quot said a separate report by the Citizens Research Council of Michigan.

    A new analysis of the state’s fiscal situation by the Citizens Research Council of Michigan offers important perspective.

    The Citizens Research Council of Michigan’s new report on the 2012 budget confirms that Gov. Rick Snyder and lawmakers did what they set out out to do.

    “One of the traditional ways of evaluating traditional city services is to look first at those that are required by state law,” said Bettie Buss, senior research analyst at the nonpartisan Citizens Research Council. “So you determine what the city is mandated to do first.”

    Next, she said, consider functions that are independently funded or generate enough revenue to be self-supporting.
    “Another screen is to look at those functions that are essential to the other functions,” Buss said. “Then those things that are left … those are the places where you start making decisions. Then once you’ve determined what functions that you either must continue or it makes financial sense to continue, look at the most efficient way to deliver those services.
    “That’s where the creative thinking comes in, how can you combine services, how multiple services can use the same equipment or same personnel in ways that make it more efficient or more effective to deliver those services.”
    A problem that often arises is that the people who work in cities are often invested in doing things the way they’ve always been done.
    “Creative thinking becomes very, very challenging,” Buss said. “You have to wipe the slate clean. We have this equipment, this personnel. How do you get the most bang for your buck?”

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    The Citizens Research Council of Michigan – www.crcmich.org/PUBLICAT/2010s/2011/rpt368.html – says when the financial manager law is implemented the state will appoint an emergency manager “who would assume all of the authority and responsibility of local officials, as well as have power to terminate collective bargaining agreements and contracts, and even to dissolve the unit of government.”

    Video coverage of Onekama Forum

    That’s just not right. As confirmed by Bettie Buss of the Citizens Research Council of Michigan, which did an analysis of the law, many of the biggest powers of the new EMs require approval of other high-ranking officials.

    The Village of Onekama is considering a merger with Onekama Township.

    Wednesday night, the Citizens Research Council gave a presentation to Onekama residents outlining the pros and cons of a government consolidation.

    The Citizens Research Council (CRC) is helping the Manistee County community analyze options and implications of shifting to one government unit instead of two. Eric Lupher, Director of Local Affairs for CRC will present a business case for single government along with the apparent advantages and disadvantages. The Alliance for Economic Success will then facilitate an open discussion among the public about the concept.

    A new report says consolidating the Village of Onekama and Onekama Township makes sense. The report was put together by the Citizens Research Council of Michigan.

    There’s no arguing against the logic behind such a move. The nonpartisan Citizens Research Council of Michigan, in an extensive analysis in July 2009, reported that state and local governments can expect their costs to fund health care for retired employees to grow at a rate that far outpaces the national rate of inflation. That’s owing to rising health care costs that consistently outstrip the inflation rate and the increasing longevity of retirees.

    A new report by the Citizens Research Council recommends changes to Michigan’s process for drawing new legislative districts. The non-profit policy group says an amendment to the state constitution should be drafted. Among the recommendations in the report is increasing transparency in the process of drawing new districts for Congress and the state Legislature, and that those districts be determined by an independent redistricting commission.

    With the Republican Legislature poised to redraw Michigan congressional districts to maximize their advantage in the state’s Capitol Hill delegation, the nonpartisan Citizens Research Council of Michigan has issued a report advising the adoption of constitutional procedures to direct the decennial redrawing of congressional and legislative districts.

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    The Michigan legislature is preparing to redraw the state’s legislative and congressional districts. The Citizens Research Council of Michigan recommends that as part of this process the legislature should also propose changes to Michigan’s Constitution to guide future redistricting efforts.

    Combined, the state’s minimum per-student foundation allowance would drop more than 6 percent from the current $7,316 to $6,846, although some of that cut would be offset with the one-time aid to schools. Districts counter that the one-time aid does not even make up for their overall rising costs, particularly those connected to the retirement system. The nonpartisan Citizens Research Council of Michigan says retirement system contribution costs will rise an average of $245 per student next fiscal year.

    At Bledsoe’s invitation, Eric Lupher, director of local affairs for the nonprofit Citizens Research Council of Michigan, spoke to an audience of roughly 40 people about the reasons the state’s municipalities are in dire financial straights and what can be done to start helping them.

    One state that has been in the forefront of government-sponsored “economic development” is Michigan. As Michael Lafaive, who works for the Mackinac Center in that state, points out, a study done by the Citizens Research Council (CRC) on tax abatements indicates there are few benefits

    Some of the districts are struggling because they’re losing money for providing bilingual education and other services not covered by the per-pupil grant. Districts also on the hook for pension payments for school employees that average $245 per pupil, according to the nonpartisan Citizens Research Council.

    The president of the Citizens Research Council believes new lower taxes on Michigan businesses should increase the return on capital invested in Michigan leading to greater investment and economic growth.

    “Dollars appropriated for economic development will spur investment,” said Jeff Guilfoyle. Guilfoyle, who leads the Livonia-based nonprofit, nonpartisan CRC, highlighted the state budget at a Town Hall meeting Tuesday at Schoolcraft College, hosted by State Rep. John Walsh, R-Livonia.
    But Guilfoyle also added a caveat: that the overall tax change in Michigan is “revenue neutral” — that the tax increase on seniors and low-income workers will reduce their consumption, which has a negative impact on Michigan’s economy.

    About 100,000 dwellings are vacant, according to the Citizens Research Council of Michigan. The median home sale price in March was $8,505. And that’s up from March 2010, when it was $7,725, according to Realcomp II Ltd., a multiple-listing service in suburban Farmington Hills.

    In Michigan, corrections makes up 30 percent of public employees, according to the Citizens Research Council of Michigan. Costs of incarceration run about $30,000 per prisoner per year, and to add to the burden, Michigan’s incarceration rate is nearly 50 percent higher than its Great Lakes neighbors’, the Council found. Additionally, from fiscal year 1999-2000 to fiscal year 2009-10, appropriations in the Department of Corrections increased by $441.7 million, or about 29 percent, according to the Senate Fiscal Agency.

    One non-profit organization, the Citizens Research Council, predicts declining values for the state of Michigan as a whole for at least two years. Taxable values may not return to 2007 levels for 12 to 15 years, according to Director of Local Affairs Eric Lupher.

    Lupher explained certain aspects of tax legislation, such as the Headlee Amendment and the taxable value system put in place in 1994 could limit how fast taxable values could spring back, since individual properties may increase only by the rate of inflation and no more than 5 percent a year.
    “I think we have to plan on lower revenues for a long time,” Lupher said.

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    What’s not revisionism are the claims that Snyder intends to use the flush-with-cash School Aid Fund to fix a broken general fund, said Craig Thiel, director of state affairs with the nonpartisan Citizens Research Council of Michigan, a think tank that studies state budgets and policy.

    “I would be hard-pressed to argue that that’s not happening,” Thiel said. “We can see that on the balance sheet. Clearly, it’s legal. The issue of whether he can do it is, in my mind and in the Research Council’s mind, pretty settled.”

    The government leaders asked the Citizens Research Council of Michigan to do a study of a four-way consolidation. The cost, up to $10,000, was to be shared. In January 1966, they got an 80-page report titled “Municipal Consolidation in the Jackson Community.”

    However much it pains me to oppose my mayor, I am compelled to do so based on the facts. It is a well-documented fact that reopening, constructing or expanding prisons or jails does not prevent or reduce crime. As crazy as it may seem, it does not even deter crime, according to the Citizens Research Council of Michigan, a privately funded, not-for-profit public affairs research organization based in Lansing and Livonia.

    Worse yet, the Governor would simply turn to a tired political shell game to pay for these overreaching tax breaks. First, he takes $895 million out of the school aid fund, money intended for K-12 education, to pay for general fund expenses. Although the Snyder claims these cuts can be weathered by our schools, a review by the Citizens Research Council showed that the Governor’s proposal actually plunges about 150 school districts into bankruptcy and leaves many others teetering on the brink.

    Michigan’s new law for emergency financial managers addresses the frustrations that such managers had under the old law, “but does so at the expense of local democracy and collective bargaining rights,” say researchers for the Citizens Research Council of Michigan.

    Eric Lupher, director of local affairs for Citizens Research Council, a Lansing-based public policy organization, presented an overview of Snyder’s proposals, legal obstacles and different strategies for consolidation.

    Video content

    Snyder proposes cutting public schools by about $470 per student, including the continuation of a $170 per student reduction in place for the current budget cycle. The nonpartisan Citizens Research Council of Michigansays the effective per-student loss for districts next fiscal year would be $715 once other factors such as increased school contributions to retirement plans are included. That would be the equivalent of roughly a 10 percent cut on a per-student basis for schools at the lower end of Michigan’s funding scale.

    People were leaving, its population down 10.7 percent between 1950 and 10 years later. Auto jobs were disappearing, casualties of consolidation and competition. The new mayor, Jerome Cavanagh, inherited a city budget deficit that the Citizens Research Council of Michigan pegged at $15 million.

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    “In the national context, we’re slightly above the national average,” Craig Thiel of the Citizens Research Councilsaid. “When you look at the Great Lakes neighbors, we tend to be below those states.”

    Local governments are looking at those types of savings because they have been feeling the impact of a declining economy for almost 10 years, according to Lupher of the Citizens Research Council of Michigan.

    Snyder has proposed shifting the nearly $900 million so funding for higher education wouldn’t have to come from the depleted general fund. But that would drop the minimum grant money school districts could collect from $7,316 per student to $6,846 and the maximum from $8,489 to $8,019, according to the nonpartisan Citizens Research Council.

    Eric Lupher, director of local government affairs for the Citizens Research Council, said a metropolitan government doesn’t necessarily save money but the move can enhance the size, population and stature of a city in a way that makes it attractive to residents and prospective businesses.

    And, in Onekama, the village board has asked the Citizens Research Council of Michigan to put together a report on consolidation with the Township.

    A report by the Citizens Research Council of Michigan issued in September showed that MEAP test results from Michigan charter schools are generally higher than those in traditional public school districts, but still below statewide averages.

    Bettie Buss, a senior researcher with the council, said some public school academies produce excellent academic results — the school that ranked highest in MEAP performance in 2009 was a public school academy operated by National Heritage Academies — but standardized test scores of charter students lag statewide averages.

    Michigan school officials “knew this day was coming,” said Craig Thiel, director of state affairs for the Citizens Research Council of Michigan, a nonpartisan think tank that studies government funding issues. “My own take-away is these cuts should have occurred three years ago.

    “If you look at any metric, Michigan is near the top (in K-12 spending). But the resources to pay for that has changed dramatically in a short period,” Thiel said. “The political reality is that we have a new governor who says he’s going to get state spending in line with resources.”

    A study by the Mackinac Center for Public Policy concluded that the most cost-effective size for school districts in Michigan is roughly 2,900 students. “There are more potential savings by breaking up large districts than by consolidating smaller ones,” said Michael VanBeek, director of education policy at the Mackinac Center. Other experts suggest the ideal range for districts is somewhere between 2,000 and 5,000 students. “There’s not one answer,” said Eric Lupher, director of local affairs for the Citizens Research Council of Michigan.

    But the governor’s line items for programs and spending wouldn’t be binding. That basically could allow unelected department heads rather than legislators to decide how the money should be spent, said Craig Thiel, state affairs director for the nonpartisan Citizens Research Council in Lansing.

    Under Snyder’s plan, public schools would get $781 million less in per-pupil costs, effectively cutting their state funding by $715 per student, according to the nonpartisan Citizens Research Council in Livonia.

    In fact, a recent report by the nonpartisan Citizens Research Council of Michigan, a think-tank that studies the effectiveness of government programs, makes a strong case for preschool programs such as Head Start, saying every dollar invested pays off many times over in savings on a multitude of fronts, from K-12 special education costs to later reductions in crime and welfare costs.

    The commission reviews and approves the Police Department’s budget before it is sent to the mayor and City Council. It is also tasked with overseeing the investigation of citizen complaints, and acts “as final authority in imposing or reviewing discipline of employees of the department,” as noted in an analysis conducted by the nonprofit Citizens Research Council of Michigan.

    But for the upcoming budget year, Snyder wants to hand all school districts cuts of 8 percent to 10 percent. The effective $715-per-student reduction is the result of losing $170 per student in federal money, a $300 cut by Snyder in per-pupil funding and the fact that districts have to pay a bigger share of pensions, costing them $245 per student, according to the nonpartisan Citizens Research Council.

    The effective $715-per-student reduction is the result of losing $170 per student in federal money, a $300 cut by Snyder in per-pupil funding and the fact that districts have to pay a bigger share of pensions, costing them $245 per student, according to the nonpartisan Citizens Research Council.

    According to the Citizens Research Council of Michigan, public employees’ pensions represent roughly one-quarter of the pension amounts currently sheltered from the state income tax.

    Public schools would get $781 million less in per-pupil costs, effectively cutting their state funding by $715 per student — a 10 percent reduction in the state’s minimum grant of $7,316 and an 8 percent cut for those receiving the maximum grant of $8,489, according to the nonpartisan Citizens Research Council in Livonia.

    But for the upcoming budget year, Snyder wants to hand all school districts cuts of 8 percent to 10 percent. The effective $715-per-student reduction is the result of losing $170 per student in federal money, a $300 cut by Snyder in per-pupil funding and the fact that districts have to pay a bigger share of pensions, costing them $245 per student, according to the nonpartisan Citizens Research Council.

    The budget anticipates $180 million in savings by calling for all state government workers to contribute 20 percent of their health care costs. A proposal by Kent County Republican Sen. Mark Jansen would require all public employees (state, municipal, school) to pay 25 percent of their health care costs, saving an estimated $700 million. Citizens Research Council President Jeff Guilfoyle estimates public employees make up 15 percent of the state’s workforce.

    “Those local governments that have to formulate their budgets now have to plan for the worst,” said Eric Lupher, an analyst at Citizens Research Council of Michigan, a nonpartisan think tank. “As we can see in Allen Park, it is not pretty.”

    Snyder announced his 2011-12 fiscal year budget proposal almost two weeks ago and on Wednesday, the Citizens Research Council held an internet conference Wednesday to share its feelings and explain the budget in depth. The CRC is independent research organization that alalyzes spending and policies in Michigan.

    Snyder proposes cutting K-12 education by about $470 per student. The Citizens Research Council of Michigansays the effective per-student cut is $715 once other factors such as increased school contributions to retirement plans are included. That would be the equivalent of a 10 percent cut on a per-student basis for schools at the lower end of Michigan’s funding scale.

    The costs of retiree health care are casting a long shadow over budgets as Michigan and its local units of government struggle with financial pressure.

    A recent study by the Citizens Research Council of Michigan illustrates just how difficult it will be to get out of that shadow.

    The Citizens Research Council of Michigan, the Center for Michigan, Business Leaders for Michigan, among others, joined the chorus, arguing that one effective counter is rejuvenating a moribund business community because growth can raise revenue and create jobs.

    The Michigan Citizens Research Council just released a study noting that those retiree health care benefits in a lot of counties are underfunded and are going to be a large drag on local government resources.

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    Many Michigan county governments haven’t set aside enough money to pay for their retirees’ health care costs and need to take steps to get the growing costs under control, the nonpartisan Citizens Research Council says in a new study.

    Washtenaw County is nearly $150 million behind on setting aside funding for future retiree health care benefits, but it’s managing the problem better than many of its peers in the state, a new report by the Citizens Research Council of Michigan suggests.

    If concessions are just focused on wages alone, the state’s 51,000 workers would take a salary cut of 12 percent, according to Craig Thiel, director of state affairs for the Citizens Research Council, a nonpartisan public policy research organization. That’s a $6,600 annual reduction for the average state worker salary of about $55,000, according to the state Civil Service Commission.

    Many Michigan county governments haven’t set aside enough money to pay for their retirees’ health care costs and need to take steps to get the growing costs under control, the nonpartisan Citizens Research Council says in a new study.

    The nonpartisan Citizens Research Council says in a study released this week that 29 of Michigan’s 83 counties offer full health care benefits to retirees, 15 provide limited benefits and 39 provide no benefits or require retirees to pay 100 percent of the costs.

    Many of Michigan’s local governments have made retirement promises to their employees that they probably can’t keep. A new study from the Citizens Research Council of Michigan finds that counties, municipalities and schools have built up huge retiree health care liabilities, most of which are unfunded. Dealing with these costs can no longer be avoided or postponed.

    FOX 2’s Charlie LeDuff asked Bettie Buss, Senior Research Associate at the Citizens Research Council of Michigan, some simple, straight-forward questions about how why the city of Detroit cannot balance it’s budget.

    “I’ve been saying for several years that we’re defining a new normal,” said Eric Lupher, director of local affairs for the Citizens Research Council of Michigan. “The level of services that we had a decade ago is not likely to resemble the level of services we’re going to see in the next five years.”

    Gov. Rick Snyder doesn’t seem interested in investing in children right now, but one reason to reconsider: a new report from the Citizens Research Council of Michigan on the value of early-childhood education.

    As the law stands, merging functions won’t necessarily save cities money, said Bettie Buss, senior research analyst at the Citizens Research Council.

    The Public Employees Relations Act, Act 312, the Urban Cooperation Act, the Intergovernmental Transfer of Functions and Responsibilities Act, the Emergency Service Authorities Act, the Metropolitan Transportation Authorities Act all have language saying that public employees can’t be put in a negative position with regard to benefits and wages as the result of a merger, Buss said.
    “What we’ve found is the economies just aren’t there,” she said. “It’s expensive to do up front, and if you’re not getting long-term savings why would you do it? The state needs to remove barriers to shared services.”

    Bettie Buss, senior research analyst at the nonpartisan Citizens Research Council, also cautioned against intervention too early.

    “How far do you go with your locally elected officials? I think you go as far as you possibly can with them,” she said. “I think there’s real danger with the state trying to step in too soon.”
    There’s another problem, Buss said. The only power that would allow a more effective resolution of financial problems is the power to abrogate contracts — and placing that power in the hands of a mayor or emergency financial manager is unconstitutional, she said. “So how does that work?”

    “For more than a decade, groups like the Citizens Research Council have warned of the growing structural deficit,” Ruff said. “One hopes that this will cure what’s been steadily mounting for the last decade. Today may be the day of reckoning.”

    “What voters are going to have to decide is do they want to balance the budget exclusively with cuts as opposed to new revenues, and if so, are these the things they want to cut?” says Jeffrey Guilfoyle, the President of the Citizens Research Council of Michigan.

    The early release of prisoners and closing of more facilities, reducing the Department of Corrections work force. The average Michigan prisoner is incarcerated 14 months longer than those in other Great Lakes states, according to the nonpartisan Citizens Research Council.

    The auto industry realized its cost structure and legacy costs were unsustainable and took action to address the imbalance. The previous governor and legislature behaved like Rip Van Winkle, closing their eyes to reports and commentary from The Center For Michigan, Citizens Research Council of Michigan, Business Leaders for Michigan, The Mackinac Center and my 2004 report: “Structural Issues Facing Michigan Schools in the 21st Century” that there was a need to address the unsustainable cost associated with maintaining 550 local school districts and runaway healthcare and pension costs. To date, actions taken to address these issues border on anemic to non-existent.

    Jeffrey Guilfoyle, president of Citizens Research Council of Michigan, a nonpartisan think tank, said health-care cuts are crucial to overhauling the budget. Without them, he said, “that budget gap is going to reappear.”

    Citizens Research Council of Michigan, a state budget watchdog group, projects that the MPSERS contribution rate that was 12 percent as recently as 2002 will hit a staggering 30 percent by 2020 — the equivalent of $6 billion in today’s dollars.

    According to the Citizens Research Council of Michigan, unrestricted state revenue sharing has dropped 31 percent since 2000 — or by $4 billion. It’s estimated those cuts have caused more than 2,400 police officers and 1,800 firefighters to lose their jobs.

    A separate study by the Citizens Research Council of Michigan released last week reported that half the households in Michigan living below the poverty level were headed by women with no husband present. Nearly half of all births in Michigan are to single women living in poverty.

    The guide was developed by Business Leaders, Anderson Economic Group LLC, the Citizens Research Council of Michigan, the Michigan Association of Certified Public Accountants and the Michigan Government Finance Officers Association.

    Onekama Township and the Village of Onekama will begin a process to consider options for consolidating their township and village governments into one governmental entity.

    The process will be facilitated by the non-profit Citizen’s Research Council of Michigan. This is one of the few times in Michigan’s history that a township and village have jointly decided to consider consolidation.

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    “Just nominating themselves might be driven by fiscal conditions” in Michigan, said Eric Lupher of Michigan Citizens Research Council in Livonia.

    “These projects are the type of things we used to see government do. Now we see those things falling by the wayside as government focuses on core services,” Lupher said.

    Sharing governance, or transferring control of the system, said Bettie Buss, senior research analyst at the nonpartisan Citizens Research Council, holds no political benefit for Detroit.

    “That becomes a pure political fight — does Detroit have the power to retain the system?” she said. “Does Detroit have the power to stop it?”
    In a report last year on the city’s fiscal condition, Buss wrote that the water department is the city’s most valuable asset, should the city’s financial situation deteriorate to the point where a sale would become desirable.
    But it’s hard to put a price tag on the system, she said. Suburbs buying into the system would likely finance that through bonds that would be paid by customers through rate increases.
    In addition, funds to improve the system after a theoretical sale also would be paid for with bond proceeds.
    “Is either the city’s deficit and cash position so bad, or is there something the city wants so desperately that it needs to sell this asset, and can suburbanites be convinced that control of the system is worth the increased cost?” Buss asked.

    The 10-page report from the nonprofit Citizens Research Council of Michigan comes as many communities across Michigan — including Ann Arbor — are considering city income taxes to close multimillion-dollar budget shortfalls.

    “You can’t blame cities, they just got caught (in the stock market crunch),” said Bettie Buss of the independent Citizens Research Council of Michigan. Buss, who authored a 2009 report on local and state pension plans in Michigan, said cities have been tossed about by an array of negative trends: the stock market collapse in 2008, the continuing large increases in health care costs, longer life-spans for retirees and a shrinking number of active employees to help support a growing number of retirees.

    In his State of the State Address, Governor Rick Snyder proposed offering incentives to encourage local governments to share services. Eric Lupher is the Director of Local Affairs for the Citizens Research Councilwhich analyzes public policy. He says police and fire protection is where local governments spend most of their money. But Lupher says consolidating public safety services is a tough sell to citizens who want to know that there be a quick response in case of an emergency.

    As the Citizens Research Council has explained, truth in sentencing is a primary reason the average prison stay in Michigan is much longer than in comparable states. A recent Senate Fiscal Agency report notes that by contributing to the aging of our prisoner population, truth in sentencing also drives up health care costs.

    “We would see major changes on the spending side, if it were all dealt with on the spending side,” says Craig Thiel, with the non-partisan Citizens Research Council of Michigan. “I don’t think you can get rid of a $3 billion shortfall through just efficiencies in the state government.”

    Suggesting, Thiel says, that the most likely budget solution will involve a mix of cuts and increased revenues.
    Otherwise, the state would see major cuts to universities; payments to doctors; health care subsidies for low-income families; revenue-sharing with local cities and towns; and corrections funding, meaning potentially fewer prisoners incarcerated.

    Jeff Guilfoyle and Craig Thiel of the Citizens Research Council of Michigan are very knowledgeable. And a lot of the economists I like are at Michigan State University, the University of Michigan and Wayne State University.

    Jeff Guilfoyle, president of the nonpartisan Citizens Research Council of Michigan, said the state’s budget would have been balanced for a while in the wake of the 2007 tax increases “had we not hit the national recession of 2009.” General-fund revenue that in 2008 had risen 12.5 percent, in 2009 dropped 22 percent, he said.

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    2011 Media Citations

    The media recognize that without a trusted, independent source of data and analysis, the flow of information about state and local government issues would be controlled by two sources — the governmental units themselves and interest groups. CRC is that trusted source. Here are the latest articles in which CRC is cited:

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    “There were lot of reforms that were a long time coming,” said Craig Thiel, director of state affairs for the Citizens Research Council of Michigan, a think tank that offers nonpartisan, research-based analyses of state policies.

    “The changes this year in education were as broad-based and far-reaching as anything we’ve seen in a long time,” Thiel said. They weren’t changes on the periphery, but in core areas, he said, led by a governor intent on reinventing Michigan and a Republican Legislature willing to butt heads with the K-12 establishment.
    “One story this year was that the state was willing to be the bogeyman” on initiatives that have meet with fierce resistance in the K-12 community, such as forcing school employees to contribute more toward health insurances, Thiel said.
    “These are things that local schools have never tried to do or tried to do and threw up their hands in frustration. This year, the state came in and just did it,” he said.

    The nonpartisan Citizens Research Council concluded in a July report that the business tax cut likely will have a positive effect on business investment and Michigan’s reputation in the business community. But it sees potential pitfalls as individuals pick up the tab through higher income tax payments, reducing their ability to spend in ways that would spur the economy.

    “Because of the offsetting nature of these effects, any overall effect on growth, positive or negative, is likely to be small,” the report concluded.

    Jeffrey Guilfoyle, president of the Citizens Research Council, studied Detroit’s finances earlier this month and pegged unfunded retirement and debt costs at $14.1 billion, equaling $20,000 per city resident.

    “It’s pretty clear that they’re in a dire situation,” he said. “They’re not putting any money aside for future retirees. That is a real millstone around the city’s neck.”

    In fact, House Bill 4936 does not prevent people from changing state law through a ballot initiative. According to the Citizens Research Council, the people of Michigan can “propose laws and enact and reject laws.” The power of initiative extends to any law the Legislature may enact and is invoked by filing petitions containing signatures of registered voters equal in number to at least 8 percent of the total votes cast in the last election for governor.

    Eric Lupher, director of local affairs for the nonpartisan Citizens Research Council of Michigan, said that the impact of these changes is likely to be political, not legal.

    “The reality is that the law (the Urban Cooperation Act) appeared to create the illusion that (local governments) had to round up or pay the higher salary (when merging two public service agencies). It didn’t say that,” Lupher said. “Local governments used that as an excuse.”
    Lupher was quick to add, however, that there’s a fair amount of service cooperation going on in Michigan now — and that by making it more clear that local governments are not locked into higher pay scales, the changes may propel action in at least one region of the state.
    “Part of the charge (for the bills) was from some of the Grand Rapids communities. They seriously are interested in cooperating. They found that the illusion was getting in the way,” Lupher said. “Grand Rapids, Walker, Kentwood, other communities — they are collaborating much more than anywhere else in the state and have ideas on more collaboration.”

    The Citizens Research Council of Michigan estimates that in addition to the short-term budget deficit, the city owes $1.5 billion on bonds it has issued to keep its pension systems funded. To make matters worse, it has $5 billion in other unfunded liabilities for retirement benefits for city workers.

    The city owes bondholders, workers, retirees and others more than $14 billion, according to the Citizens Research Council of Michigan, a public policy group.

    But what’s the real story? What took my breath away was a report last week from the non-partisan, non-profit Citizens Research Council of Michigan. It revealed that apart from the current budget deficit, the city owes one point five billion dollars in principal debt on certificates it issued to keep its pension systems funded.

    “Public Act 4 is Public Act 72 on steroids,” said Bettie Buss, a senior research associate at public policy group Citizens Research Council of Michigan, which has analyzed the new law. “It makes it very clear the emergency manager has operational responsibilities as well as financial responsibilities.”

    “Any credible deficit elimination plan must incorporate a means to resolve the city’s future liabilities,” the Citizens Research Council of Michigan says in a new report entitled “Legacy Costs and Indebtedness of the City of Detroit.” It continues: “Without major structural changes, limited tax debt, pensions and other post-employment benefits will continue to absorb increasing amounts of the general fund, leaving less and less for essential public services.”

    A recent report from the Citizens Research Council of Michigan highlights a sometimes overlooked part of Detroit’s current fiscal crisis: the city’s debt and legacy costs.

    “It’s 7% of the population of Michigan,” said Jeff Guilfoyle, president of the Citizens Research Council of Michigan and a former top official in the state Treasury Department. “It’s 7% of our future work force being educated in the city’s schools. The city’s future affects the state’s future. And the city’s financial situation, its credit rating, weighs on everybody’s credit rating.”

    If the credit markets determine that Detroit’s fiscal problems have not been adequately dealt with, it will affect how they view the state as a whole. “This is uncharted territory,” noted Craig Thiel, state affairs director for the Citizens Research Council. The state’s or other municipalities’ bond ratings might not immediately be downgraded, but they may have to “jump through more hoops” to float debt.

    A new report from the nonpartisan Citizens Research Council of Michigan takes an exhaustive look at Detroit’s legacy costs — pension and health care obligations to retirees and bond debt — measures them against current and projected revenues and concludes that “as Detroit’s fiscal situation deteriorates, questions may arise as to the city’s ability to service its debt.”

    Structurally balancing Detroit’s $3.1 billion budget will be no easy task given the city owes bondholders, retirees and others more than $14.1 billion, according to a report released on Thursday by public policy group Citizens Research Council of Michigan.

    A new report from the Citizens Research Council of Michigan paints a stark picture of Detroit’s long-term financial obligations.

    While the full report has not yet been delivered, data gathered by the Citizens Research Council of Michiganand students from the University of Michigan Gerald R. Ford School of Public Policy was presented Nov. 9, along with recommendations. Researchers began collecting the data in spring 2010.

    The Citizens Research Council, a nonpartisan group that studies government at all levels, analyzed Detroit’s finances in 2010 and warned that the city “must be restructured.” The city, it noted, owns a small airport, has its own health service, regional water agency and streetlight department, and uses city employees, not contractors, to pick up trash.

     What we have right now is a really complicated system. If we were to pick a time to fix it, this would be a great time,  said Eric Lupher, director of local affairs at the nonpartisan Citizens Research Council of Michigan.

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    Individual tax bills vary, of course. But whether or not they realize it, Michigan property owners have benefited from property tax relief for years, said Craig Thiel, director of state affairs at the Citizens Research Council of Michigan.

    Proposal A, passed by voters in 1994, limited annual increases in the taxable value of property to the rate of inflation or 5 percent, whichever is less.
    The net effect of Proposal A for homeowners has been a tax cut because it limited the rise in taxable values of property during years when market values were rising faster than the Proposal A cap, Thiel said.
    “Now we’re enjoying lower property taxes because the value of the asset is declining,” he said. “Now you see it in your wallet.”
    But the impact of that tax cut has been minimized for a variety of reasons. For many taxpayers, the cut in their property tax bills and declining incomes have “canceled each other out,” Thiel said.

    Instead of imposing an outside manager on the city, the governor could enter into a consent agreement that gives local officials many of the expanded powers of an emergency manager. The city would have to provide a written plan of action and then abide by it. The one big difference between that approach and the imposition of an emergency manager, explains analyst Bettie Buss of the nonprofit Citizens Research Council, is that, even under a consent agreement, the city wouldn’t have the power to void established union contracts. However, once those contracts do expire, the city would have the authority to unilaterally set wage and benefit levels without having to negotiate with the unions.

    Detroit is one of 22 cities in the state with a corporate income tax, according to a January report by the nonpartisan Citizens’ Research Council. According to that report, the City Council can increase the tax rate — but the rate is capped at 1 percent.

    One possible solution may come from Eastern Michigan University and the Citizens’ Research Council, which have established a graduate level class to examine the distribution of constitutional revenue sharing for next year.

    The Citizens Research Council found that in 2006, the formula resulted in a distribution of state road funds at a rate of $270 per resident in low-population Baraga County in the Upper Peninsula, while populous Wayne County received the equivalent of $89 per resident. Engler sought a formula revision that would distribute the funding more efficiently, but it was defeated in the Legislature.

    With Gov. Rick SNYDER and others talking about dumping the 19-cent per-gallon gas tax in favor of a wholesale-price based tax, the researchers at the Citizens Research Council of Michigan have added some data to the unfolding debate and the conclusion is clear.

    The nonpartisan Citizens Research Council ran the numbers in a special report this month: If Michigan had been taxing gasoline at the wholesale price (as proposed by Governor Snyder)…

    Detroit warned investors about the risk of a Chapter 9 bankruptcy in a preliminary official statement for a $250 million debt offering in March 2010. The Citizens Research Council of Michigan said a month later that the city might have to resolve its fiscal problems by filing for Chapter 9 or appointing an emergency manager.

    Eric Lupher is with the Citizens Research Council of Michigan. He says people living in Jackson, and other cities, have to come to terms with local governments that can no longer provide services they’re gotten used to.

    These are all important changes and should be retained in a revised charter proposal or amendments to the current charter. The creation of the new office of inspector general to police corruption, however, as an analysis by the Citizens Research Council notes, could create duplication and confusion with a strengthened ethics board and the office of city auditor general.

    The proposed charter will not significantly change the economic or financial path the city is on the Citizens Research Council of Michigan concluded in its analysis of the document.

    The Michigan Citizens Research Council in 2008 analyzed the effect of the road funding formula — which favors funding based on miles of road rather than on how heavily those roads are used. As a result, it found that in 2006 the formula’s distribution of funds to local and county road agencies in rural Baraga County in the Upper Peninsula amounted to $270 for each county resident. The equivalent for Wayne County residents was about $89.

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    Panel members of the forum consisted of three charter commissioners, along with City Council Research and Analysis Division’s LaKisha Barclift and Citizens Research Council’s Bettie Buss. Former mayoral candidate Tom Barrow also sat on the panel representing the Citizen’s for Detroit’s Future organization, which has lobbied vehemently for a “no” vote on the revised charter.

    The Citizens Research Council of Michigan — a privately funded, nonpartisan public affairs research organization — also weighed in, saying the proposal does a lot to rid the city of corruption but little to give a framework for economic growth and job creation.

    “It will very probably not significantly change the economic or financial path the city is on,” said Jeffrey Guifoyle, president of the citizens council.

    Eric Lupher, director of local affairs for the Citizens Research Council of Michigan, said municipalities have been doing all they can to reshape how they operate.

    “They’ve been doing what most rational managers can do.
    They’ve been not filling positions when they can get by with it, taking furlough days, operating four days a week,” he said. “This whole rate recession, or minidepression, is causing a rethinking of what local governments should be doing.
    “It’s not treading water until things turn around, it’s reshaping and rethinking what you do.”

    Radio Interview

    “There is a recognition that they can’t depend on state revenue sharing anymore, but when everything else is collapsing around you and your tax base is down 20 to 30 percent, it’s hard to say you should just forget revenue sharing,” said Eric Lupher, director of local affairs for the Citizens Research Council of Michigan, an independent government watchdog. “You need to pay the bills. If it’s available this year, you take it. You worry about next year, next year.”

    “It’s hard to compare what Macomb is doing (with its new government structure) with what came before,” said Betty Buss, senior research associate for the Citizens Research Council in Livonia. The group is a privately funded, nonprofit public affairs research organization.

    The change is “being done while every county and every community is in uncharted economic territory,” she said.

    But going back is not an option, and even if a trip through the rear view mirror were possible the journey would have a devastating impact on the state’s poorest school districts. Granted, Proposal A, the state Constitutional Amendment approved by voters in 1994 that was touted as a plan to equalize school funding, has fallen short of its goal. But to some extent, it has lowered the spread in school funding between Michigan’s richest and poorest districts, according to the non-profit Citizens Research Council. The difference in 1995 was $6,300 per pupil; it was about $5,000 per pupil in 2010.

    Voters who want to learn more about the three ballot proposals to be decided in the Nov. 8 election can watch a League of Women Voters forum on the topics on CDTV, the city of Dearborn’s official television channel.

    The forum also includes a presentation by Eric Lupher, director of local affairs for the Citizens Research Council of Michigan, who gave a general presentation and addressed questions about Civil Service Systems.

    Citizens Research Council issues Onekama government merger report ONEKAMA — The Citizens Research Council (CRC) of Michigan has released a report that will help the Village of Onekama, Onekama Township and other local governments consider the possibilities of merging governments.

    Still, some governments are reconsidering this benefit. Michigan State University stopped offering this benefit in 2010. Bloomfield Township recently voted to cap its costs to provide it. Indeed, a report from the Citizens Research Council found that 39 county governments do not offer this benefit and that nine counties had stopped offering this benefit in the past five years.

    The Citizens Research Council (CRC) of Michigan has released a report that will help the Village of Onekama, Onekama Township and other local governments consider the possibilities of merging governments. The report is entitled “The Costs, Benefits and Alternatives for Consolidating the Onekama Governments”.

    He made that calculation based on a recent Citizens Research Council of Michigan report that states a 1 percent increase in sales tax equates to roughly $1 billion annually.

    And that promptness, said Citizens Research Council Director of Local Affairs Eric Lupher, is something generally applauded by city employees and department heads alike.

    “Civil service systems have never been beloved either by management or by labor,” said Lupher, who came to the Oct. 4 forum to provide an unbiased history of civil service. “Management sees them as getting in the way with regulations or rules. Labor often sees them as management.”
    Lupher and Walling both said that in their research, they couldn’t find many–if any–comparable cities in Michigan still using civil service commissions. Murphy-Goodrich, however, named off several–including Livonia, Westland, Royal Oak, Lansing and Dearborn Heights.

    During the forum, Eric Lupher from the Citizens Research Council explained the history behind civil service commissions.

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    The other day, suitably fitted with required jacket and necktie, I made my way to the Detroit Athletic Club for the 95th annual meeting of one of the best-respected and least-known institutions in our state — the Citizens Research Council (www.crcmich.org) of Michigan.

    The other day, suitably fitted with required jacket and necktie, I made my way to the Detroit Athletic Club for the 95th annual meeting of the best-respected — and least-known — institutions in our state: the Citizens Research Council of Michigan.

    Proponents of tax reform have said doing so would make Michigan more business-friendly, which would increase hiring and bolster the state’s economy. A July report from the nonpartisan Citizens Research Council said the impact would likely be negligible. Others have said schools could make up for the cuts by asking more from their employees.

    The tax is levied on the value of what the law euphemistically calls personal property. According to the nonpartisan Citizens Research Council of Michigan, that includes most business equipment, furniture and fixtures used by business, as well as oil pipelines, and electric and gas transmission and distribution equipment.

    According to the Citizens Research Council for Michigan, the national real GDP for metro areas was up 15.7 percent between 2001 and 2010, almost double the decade’s results for mid-Michigan.

    A recent evaluation by the Citizens Research Council of Michigan concluded “reduced business taxation on its own is likely to yield positive economic growth however this will be offset, at least in part, by the negative economic growth that accompany higher income taxes through reductions in disposable income. Any net effect, positive or negative, is likely to be small”.

    Snyder did not see fit to comply with a plan laid out in a March 2011 symposium that would cut $500 million from the prison budget. The symposium, “Finding the Path to a $1.5 Billion Corrections Budget,” was not a gathering of wild-eyed radicals, but instead a joint effort of the generally conservative Citizens Research Council, the Center for Michigan, and the Citizens Alliance on Prisons and Public Spending.

    Cusimano blamed Detroit, saying the taxes on his properties weren’t realistically assessed and he had to buy them back for his business to survive. Detroit’s tax rates — 65 mills for homeowners and 83 mills on other property owners — are the highest in the state, according to the Citizens Research Council of Michigan.

    If you walk through your child’s school this week, you might see a few empty seats in the classrooms. School enrollment in Michigan has fallen in the last generation.

    That’s the picture from the Citizens Research Council of Michigan. A new report concludes that three of five school districts had fewer students in 2009 than in 1995.

    Detroit’s tax rates — 65 mills for homeowners and 83 mills on other property owners — are the highest in the state, according to a recent Citizens Research Council of Michigan report. The average statewide rate is 31 mills for homeowners and 48 mills for other property owners.

    Since every local government that hopes to get state payments must create its own dashboard outlining what it spends money on and how it is doing, the Citizens Research Council has issued a report providing some guidance on executing that task. And the CRC report is somewhat critical of some of the models the state has provided local governments with to help with that task.

    Nearly 61 percent of the state’s 551 traditional public school districts faced some degree of declining enrollment between the 1995 and 2009 fiscal years, according to a recent report from the nonpartisan Citizens Research Council of Michigan. Data provided by the Senate Fiscal Agency indicates the overall public school enrollment dip has since continued and could extend into 2012-13. It has severe financial consequences, since much of Michigan’s education funding is based on how many students are enrolled in a district.

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    Whether that’s true or not, that there is a major crisis – and coincidentally, a major new report finally gets to the bottom of just why this is. There are few institutions more respected than the non-partisan, non-profit Citizens Research Council of Michigan, whose motto is this: The right to criticize government is also an obligation to know what you are talking about.

    Policy-makers have to decide their intent before they begin making changes to the state’s primary method for funding schools, the Citizens Research Council said in a paper released Monday.

    About 61% of Michigan’s 551 traditional public school districts faced some degree of declining enrollment between the state’s 1995 and 2009 fiscal years. That’s according to a report Monday from the nonpartisan Citizens Research Council of Michigan.

    The work group should have representation from such parties as manufacturers, the Michigan Municipal League, Citizens Research Council, Metropolitan Affairs Coalition and fiscal analysts from both political parties.

    With cities having limited options to address shortfalls, Eric Lupher of the Citizens Research Council of Michigan, said cities often turn toward cutting public safety. He said communities throughout the United States are reducing costs through such cuts.

    Any benefits from the business tax cuts won’t be felt until next year, according to the nonpartisan Citizens Research Council‘s report. It expects the tax cuts will have a positive effect on business investment in 2012 and perhaps new jobs. But the compensating increase in individual income tax payments might reduce spending that could have boosted the economy.

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    Q. The Citizens Research Council’s new review of the budget and tax changes says reducing business taxes will produce positive economic growth that will be offset, at least in part, by the negative economic growth that accompanies higher income taxes. Agree or disagree. And why?

    Q. The Citizens Research Council’s new review of the budget and tax changes says reducing business taxes will produce positive economic growth that will be offset, at least in part, by the negative economic growth that accompanies higher income taxes. Agree or disagree? And why?

    “The higher income tax collections will reduce disposable income for Michigan taxpayers,” the Citizens Research Council report said. “Lower disposable income will result in reduced consumption, a net negative for economic growth.”

    The nonpartisan Citizens Research Council‘s report says it expects a business tax cut will have a positive effect on business investment and Michigan’s reputation in the business community. But it sees potential pitfalls as individuals pick up the tab for higher income tax payments, reducing their ability to spend in ways that would spur the economy.

    “The resolution of the legal questions surrounding the income tax changes could have a significant revenue impact on the state’s fiscal plan and could require policymakers to find alternative revenues or enact further appropriation reductions to maintain budget balance,quot said a separate report by the Citizens Research Council of Michigan.

    A new analysis of the state’s fiscal situation by the Citizens Research Council of Michigan offers important perspective.

    The Citizens Research Council of Michigan’s new report on the 2012 budget confirms that Gov. Rick Snyder and lawmakers did what they set out out to do.

    “One of the traditional ways of evaluating traditional city services is to look first at those that are required by state law,” said Bettie Buss, senior research analyst at the nonpartisan Citizens Research Council. “So you determine what the city is mandated to do first.”

    Next, she said, consider functions that are independently funded or generate enough revenue to be self-supporting.
    “Another screen is to look at those functions that are essential to the other functions,” Buss said. “Then those things that are left … those are the places where you start making decisions. Then once you’ve determined what functions that you either must continue or it makes financial sense to continue, look at the most efficient way to deliver those services.
    “That’s where the creative thinking comes in, how can you combine services, how multiple services can use the same equipment or same personnel in ways that make it more efficient or more effective to deliver those services.”
    A problem that often arises is that the people who work in cities are often invested in doing things the way they’ve always been done.
    “Creative thinking becomes very, very challenging,” Buss said. “You have to wipe the slate clean. We have this equipment, this personnel. How do you get the most bang for your buck?”

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    The Citizens Research Council of Michigan – www.crcmich.org/PUBLICAT/2010s/2011/rpt368.html – says when the financial manager law is implemented the state will appoint an emergency manager “who would assume all of the authority and responsibility of local officials, as well as have power to terminate collective bargaining agreements and contracts, and even to dissolve the unit of government.”

    Video coverage of Onekama Forum

    That’s just not right. As confirmed by Bettie Buss of the Citizens Research Council of Michigan, which did an analysis of the law, many of the biggest powers of the new EMs require approval of other high-ranking officials.

    The Village of Onekama is considering a merger with Onekama Township.

    Wednesday night, the Citizens Research Council gave a presentation to Onekama residents outlining the pros and cons of a government consolidation.

    The Citizens Research Council (CRC) is helping the Manistee County community analyze options and implications of shifting to one government unit instead of two. Eric Lupher, Director of Local Affairs for CRC will present a business case for single government along with the apparent advantages and disadvantages. The Alliance for Economic Success will then facilitate an open discussion among the public about the concept.

    A new report says consolidating the Village of Onekama and Onekama Township makes sense. The report was put together by the Citizens Research Council of Michigan.

    There’s no arguing against the logic behind such a move. The nonpartisan Citizens Research Council of Michigan, in an extensive analysis in July 2009, reported that state and local governments can expect their costs to fund health care for retired employees to grow at a rate that far outpaces the national rate of inflation. That’s owing to rising health care costs that consistently outstrip the inflation rate and the increasing longevity of retirees.

    A new report by the Citizens Research Council recommends changes to Michigan’s process for drawing new legislative districts. The non-profit policy group says an amendment to the state constitution should be drafted. Among the recommendations in the report is increasing transparency in the process of drawing new districts for Congress and the state Legislature, and that those districts be determined by an independent redistricting commission.

    With the Republican Legislature poised to redraw Michigan congressional districts to maximize their advantage in the state’s Capitol Hill delegation, the nonpartisan Citizens Research Council of Michigan has issued a report advising the adoption of constitutional procedures to direct the decennial redrawing of congressional and legislative districts.

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    The Michigan legislature is preparing to redraw the state’s legislative and congressional districts. The Citizens Research Council of Michigan recommends that as part of this process the legislature should also propose changes to Michigan’s Constitution to guide future redistricting efforts.

    Combined, the state’s minimum per-student foundation allowance would drop more than 6 percent from the current $7,316 to $6,846, although some of that cut would be offset with the one-time aid to schools. Districts counter that the one-time aid does not even make up for their overall rising costs, particularly those connected to the retirement system. The nonpartisan Citizens Research Council of Michigan says retirement system contribution costs will rise an average of $245 per student next fiscal year.

    At Bledsoe’s invitation, Eric Lupher, director of local affairs for the nonprofit Citizens Research Council of Michigan, spoke to an audience of roughly 40 people about the reasons the state’s municipalities are in dire financial straights and what can be done to start helping them.

    One state that has been in the forefront of government-sponsored “economic development” is Michigan. As Michael Lafaive, who works for the Mackinac Center in that state, points out, a study done by the Citizens Research Council (CRC) on tax abatements indicates there are few benefits

    Some of the districts are struggling because they’re losing money for providing bilingual education and other services not covered by the per-pupil grant. Districts also on the hook for pension payments for school employees that average $245 per pupil, according to the nonpartisan Citizens Research Council.

    The president of the Citizens Research Council believes new lower taxes on Michigan businesses should increase the return on capital invested in Michigan leading to greater investment and economic growth.

    “Dollars appropriated for economic development will spur investment,” said Jeff Guilfoyle. Guilfoyle, who leads the Livonia-based nonprofit, nonpartisan CRC, highlighted the state budget at a Town Hall meeting Tuesday at Schoolcraft College, hosted by State Rep. John Walsh, R-Livonia.
    But Guilfoyle also added a caveat: that the overall tax change in Michigan is “revenue neutral” — that the tax increase on seniors and low-income workers will reduce their consumption, which has a negative impact on Michigan’s economy.

    About 100,000 dwellings are vacant, according to the Citizens Research Council of Michigan. The median home sale price in March was $8,505. And that’s up from March 2010, when it was $7,725, according to Realcomp II Ltd., a multiple-listing service in suburban Farmington Hills.

    In Michigan, corrections makes up 30 percent of public employees, according to the Citizens Research Council of Michigan. Costs of incarceration run about $30,000 per prisoner per year, and to add to the burden, Michigan’s incarceration rate is nearly 50 percent higher than its Great Lakes neighbors’, the Council found. Additionally, from fiscal year 1999-2000 to fiscal year 2009-10, appropriations in the Department of Corrections increased by $441.7 million, or about 29 percent, according to the Senate Fiscal Agency.

    One non-profit organization, the Citizens Research Council, predicts declining values for the state of Michigan as a whole for at least two years. Taxable values may not return to 2007 levels for 12 to 15 years, according to Director of Local Affairs Eric Lupher.

    Lupher explained certain aspects of tax legislation, such as the Headlee Amendment and the taxable value system put in place in 1994 could limit how fast taxable values could spring back, since individual properties may increase only by the rate of inflation and no more than 5 percent a year.
    “I think we have to plan on lower revenues for a long time,” Lupher said.

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    What’s not revisionism are the claims that Snyder intends to use the flush-with-cash School Aid Fund to fix a broken general fund, said Craig Thiel, director of state affairs with the nonpartisan Citizens Research Council of Michigan, a think tank that studies state budgets and policy.

    “I would be hard-pressed to argue that that’s not happening,” Thiel said. “We can see that on the balance sheet. Clearly, it’s legal. The issue of whether he can do it is, in my mind and in the Research Council’s mind, pretty settled.”

    The government leaders asked the Citizens Research Council of Michigan to do a study of a four-way consolidation. The cost, up to $10,000, was to be shared. In January 1966, they got an 80-page report titled “Municipal Consolidation in the Jackson Community.”

    However much it pains me to oppose my mayor, I am compelled to do so based on the facts. It is a well-documented fact that reopening, constructing or expanding prisons or jails does not prevent or reduce crime. As crazy as it may seem, it does not even deter crime, according to the Citizens Research Council of Michigan, a privately funded, not-for-profit public affairs research organization based in Lansing and Livonia.

    Worse yet, the Governor would simply turn to a tired political shell game to pay for these overreaching tax breaks. First, he takes $895 million out of the school aid fund, money intended for K-12 education, to pay for general fund expenses. Although the Snyder claims these cuts can be weathered by our schools, a review by the Citizens Research Council showed that the Governor’s proposal actually plunges about 150 school districts into bankruptcy and leaves many others teetering on the brink.

    Michigan’s new law for emergency financial managers addresses the frustrations that such managers had under the old law, “but does so at the expense of local democracy and collective bargaining rights,” say researchers for the Citizens Research Council of Michigan.

    Eric Lupher, director of local affairs for Citizens Research Council, a Lansing-based public policy organization, presented an overview of Snyder’s proposals, legal obstacles and different strategies for consolidation.

    Video content

    Snyder proposes cutting public schools by about $470 per student, including the continuation of a $170 per student reduction in place for the current budget cycle. The nonpartisan Citizens Research Council of Michigansays the effective per-student loss for districts next fiscal year would be $715 once other factors such as increased school contributions to retirement plans are included. That would be the equivalent of roughly a 10 percent cut on a per-student basis for schools at the lower end of Michigan’s funding scale.

    People were leaving, its population down 10.7 percent between 1950 and 10 years later. Auto jobs were disappearing, casualties of consolidation and competition. The new mayor, Jerome Cavanagh, inherited a city budget deficit that the Citizens Research Council of Michigan pegged at $15 million.

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    “In the national context, we’re slightly above the national average,” Craig Thiel of the Citizens Research Councilsaid. “When you look at the Great Lakes neighbors, we tend to be below those states.”

    Local governments are looking at those types of savings because they have been feeling the impact of a declining economy for almost 10 years, according to Lupher of the Citizens Research Council of Michigan.

    Snyder has proposed shifting the nearly $900 million so funding for higher education wouldn’t have to come from the depleted general fund. But that would drop the minimum grant money school districts could collect from $7,316 per student to $6,846 and the maximum from $8,489 to $8,019, according to the nonpartisan Citizens Research Council.

    Eric Lupher, director of local government affairs for the Citizens Research Council, said a metropolitan government doesn’t necessarily save money but the move can enhance the size, population and stature of a city in a way that makes it attractive to residents and prospective businesses.

    And, in Onekama, the village board has asked the Citizens Research Council of Michigan to put together a report on consolidation with the Township.

    A report by the Citizens Research Council of Michigan issued in September showed that MEAP test results from Michigan charter schools are generally higher than those in traditional public school districts, but still below statewide averages.

    Bettie Buss, a senior researcher with the council, said some public school academies produce excellent academic results — the school that ranked highest in MEAP performance in 2009 was a public school academy operated by National Heritage Academies — but standardized test scores of charter students lag statewide averages.

    Michigan school officials “knew this day was coming,” said Craig Thiel, director of state affairs for the Citizens Research Council of Michigan, a nonpartisan think tank that studies government funding issues. “My own take-away is these cuts should have occurred three years ago.

    “If you look at any metric, Michigan is near the top (in K-12 spending). But the resources to pay for that has changed dramatically in a short period,” Thiel said. “The political reality is that we have a new governor who says he’s going to get state spending in line with resources.”

    A study by the Mackinac Center for Public Policy concluded that the most cost-effective size for school districts in Michigan is roughly 2,900 students. “There are more potential savings by breaking up large districts than by consolidating smaller ones,” said Michael VanBeek, director of education policy at the Mackinac Center. Other experts suggest the ideal range for districts is somewhere between 2,000 and 5,000 students. “There’s not one answer,” said Eric Lupher, director of local affairs for the Citizens Research Council of Michigan.

    But the governor’s line items for programs and spending wouldn’t be binding. That basically could allow unelected department heads rather than legislators to decide how the money should be spent, said Craig Thiel, state affairs director for the nonpartisan Citizens Research Council in Lansing.

    Under Snyder’s plan, public schools would get $781 million less in per-pupil costs, effectively cutting their state funding by $715 per student, according to the nonpartisan Citizens Research Council in Livonia.

    In fact, a recent report by the nonpartisan Citizens Research Council of Michigan, a think-tank that studies the effectiveness of government programs, makes a strong case for preschool programs such as Head Start, saying every dollar invested pays off many times over in savings on a multitude of fronts, from K-12 special education costs to later reductions in crime and welfare costs.

    The commission reviews and approves the Police Department’s budget before it is sent to the mayor and City Council. It is also tasked with overseeing the investigation of citizen complaints, and acts “as final authority in imposing or reviewing discipline of employees of the department,” as noted in an analysis conducted by the nonprofit Citizens Research Council of Michigan.

    But for the upcoming budget year, Snyder wants to hand all school districts cuts of 8 percent to 10 percent. The effective $715-per-student reduction is the result of losing $170 per student in federal money, a $300 cut by Snyder in per-pupil funding and the fact that districts have to pay a bigger share of pensions, costing them $245 per student, according to the nonpartisan Citizens Research Council.

    The effective $715-per-student reduction is the result of losing $170 per student in federal money, a $300 cut by Snyder in per-pupil funding and the fact that districts have to pay a bigger share of pensions, costing them $245 per student, according to the nonpartisan Citizens Research Council.

    According to the Citizens Research Council of Michigan, public employees’ pensions represent roughly one-quarter of the pension amounts currently sheltered from the state income tax.

    Public schools would get $781 million less in per-pupil costs, effectively cutting their state funding by $715 per student — a 10 percent reduction in the state’s minimum grant of $7,316 and an 8 percent cut for those receiving the maximum grant of $8,489, according to the nonpartisan Citizens Research Council in Livonia.

    But for the upcoming budget year, Snyder wants to hand all school districts cuts of 8 percent to 10 percent. The effective $715-per-student reduction is the result of losing $170 per student in federal money, a $300 cut by Snyder in per-pupil funding and the fact that districts have to pay a bigger share of pensions, costing them $245 per student, according to the nonpartisan Citizens Research Council.

    The budget anticipates $180 million in savings by calling for all state government workers to contribute 20 percent of their health care costs. A proposal by Kent County Republican Sen. Mark Jansen would require all public employees (state, municipal, school) to pay 25 percent of their health care costs, saving an estimated $700 million. Citizens Research Council President Jeff Guilfoyle estimates public employees make up 15 percent of the state’s workforce.

    “Those local governments that have to formulate their budgets now have to plan for the worst,” said Eric Lupher, an analyst at Citizens Research Council of Michigan, a nonpartisan think tank. “As we can see in Allen Park, it is not pretty.”

    Snyder announced his 2011-12 fiscal year budget proposal almost two weeks ago and on Wednesday, the Citizens Research Council held an internet conference Wednesday to share its feelings and explain the budget in depth. The CRC is independent research organization that alalyzes spending and policies in Michigan.

    Snyder proposes cutting K-12 education by about $470 per student. The Citizens Research Council of Michigansays the effective per-student cut is $715 once other factors such as increased school contributions to retirement plans are included. That would be the equivalent of a 10 percent cut on a per-student basis for schools at the lower end of Michigan’s funding scale.

    The costs of retiree health care are casting a long shadow over budgets as Michigan and its local units of government struggle with financial pressure.

    A recent study by the Citizens Research Council of Michigan illustrates just how difficult it will be to get out of that shadow.

    The Citizens Research Council of Michigan, the Center for Michigan, Business Leaders for Michigan, among others, joined the chorus, arguing that one effective counter is rejuvenating a moribund business community because growth can raise revenue and create jobs.

    The Michigan Citizens Research Council just released a study noting that those retiree health care benefits in a lot of counties are underfunded and are going to be a large drag on local government resources.

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    Many Michigan county governments haven’t set aside enough money to pay for their retirees’ health care costs and need to take steps to get the growing costs under control, the nonpartisan Citizens Research Council says in a new study.

    Washtenaw County is nearly $150 million behind on setting aside funding for future retiree health care benefits, but it’s managing the problem better than many of its peers in the state, a new report by the Citizens Research Council of Michigan suggests.

    If concessions are just focused on wages alone, the state’s 51,000 workers would take a salary cut of 12 percent, according to Craig Thiel, director of state affairs for the Citizens Research Council, a nonpartisan public policy research organization. That’s a $6,600 annual reduction for the average state worker salary of about $55,000, according to the state Civil Service Commission.

    Many Michigan county governments haven’t set aside enough money to pay for their retirees’ health care costs and need to take steps to get the growing costs under control, the nonpartisan Citizens Research Council says in a new study.

    The nonpartisan Citizens Research Council says in a study released this week that 29 of Michigan’s 83 counties offer full health care benefits to retirees, 15 provide limited benefits and 39 provide no benefits or require retirees to pay 100 percent of the costs.

    Many of Michigan’s local governments have made retirement promises to their employees that they probably can’t keep. A new study from the Citizens Research Council of Michigan finds that counties, municipalities and schools have built up huge retiree health care liabilities, most of which are unfunded. Dealing with these costs can no longer be avoided or postponed.

    FOX 2’s Charlie LeDuff asked Bettie Buss, Senior Research Associate at the Citizens Research Council of Michigan, some simple, straight-forward questions about how why the city of Detroit cannot balance it’s budget.

    “I’ve been saying for several years that we’re defining a new normal,” said Eric Lupher, director of local affairs for the Citizens Research Council of Michigan. “The level of services that we had a decade ago is not likely to resemble the level of services we’re going to see in the next five years.”

    Gov. Rick Snyder doesn’t seem interested in investing in children right now, but one reason to reconsider: a new report from the Citizens Research Council of Michigan on the value of early-childhood education.

    As the law stands, merging functions won’t necessarily save cities money, said Bettie Buss, senior research analyst at the Citizens Research Council.

    The Public Employees Relations Act, Act 312, the Urban Cooperation Act, the Intergovernmental Transfer of Functions and Responsibilities Act, the Emergency Service Authorities Act, the Metropolitan Transportation Authorities Act all have language saying that public employees can’t be put in a negative position with regard to benefits and wages as the result of a merger, Buss said.
    “What we’ve found is the economies just aren’t there,” she said. “It’s expensive to do up front, and if you’re not getting long-term savings why would you do it? The state needs to remove barriers to shared services.”

    Bettie Buss, senior research analyst at the nonpartisan Citizens Research Council, also cautioned against intervention too early.

    “How far do you go with your locally elected officials? I think you go as far as you possibly can with them,” she said. “I think there’s real danger with the state trying to step in too soon.”
    There’s another problem, Buss said. The only power that would allow a more effective resolution of financial problems is the power to abrogate contracts — and placing that power in the hands of a mayor or emergency financial manager is unconstitutional, she said. “So how does that work?”

    “For more than a decade, groups like the Citizens Research Council have warned of the growing structural deficit,” Ruff said. “One hopes that this will cure what’s been steadily mounting for the last decade. Today may be the day of reckoning.”

    “What voters are going to have to decide is do they want to balance the budget exclusively with cuts as opposed to new revenues, and if so, are these the things they want to cut?” says Jeffrey Guilfoyle, the President of the Citizens Research Council of Michigan.

    The early release of prisoners and closing of more facilities, reducing the Department of Corrections work force. The average Michigan prisoner is incarcerated 14 months longer than those in other Great Lakes states, according to the nonpartisan Citizens Research Council.

    The auto industry realized its cost structure and legacy costs were unsustainable and took action to address the imbalance. The previous governor and legislature behaved like Rip Van Winkle, closing their eyes to reports and commentary from The Center For Michigan, Citizens Research Council of Michigan, Business Leaders for Michigan, The Mackinac Center and my 2004 report: “Structural Issues Facing Michigan Schools in the 21st Century” that there was a need to address the unsustainable cost associated with maintaining 550 local school districts and runaway healthcare and pension costs. To date, actions taken to address these issues border on anemic to non-existent.

    Jeffrey Guilfoyle, president of Citizens Research Council of Michigan, a nonpartisan think tank, said health-care cuts are crucial to overhauling the budget. Without them, he said, “that budget gap is going to reappear.”

    Citizens Research Council of Michigan, a state budget watchdog group, projects that the MPSERS contribution rate that was 12 percent as recently as 2002 will hit a staggering 30 percent by 2020 — the equivalent of $6 billion in today’s dollars.

    According to the Citizens Research Council of Michigan, unrestricted state revenue sharing has dropped 31 percent since 2000 — or by $4 billion. It’s estimated those cuts have caused more than 2,400 police officers and 1,800 firefighters to lose their jobs.

    A separate study by the Citizens Research Council of Michigan released last week reported that half the households in Michigan living below the poverty level were headed by women with no husband present. Nearly half of all births in Michigan are to single women living in poverty.

    The guide was developed by Business Leaders, Anderson Economic Group LLC, the Citizens Research Council of Michigan, the Michigan Association of Certified Public Accountants and the Michigan Government Finance Officers Association.

    Onekama Township and the Village of Onekama will begin a process to consider options for consolidating their township and village governments into one governmental entity.

    The process will be facilitated by the non-profit Citizen’s Research Council of Michigan. This is one of the few times in Michigan’s history that a township and village have jointly decided to consider consolidation.

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    “Just nominating themselves might be driven by fiscal conditions” in Michigan, said Eric Lupher of Michigan Citizens Research Council in Livonia.

    “These projects are the type of things we used to see government do. Now we see those things falling by the wayside as government focuses on core services,” Lupher said.

    Sharing governance, or transferring control of the system, said Bettie Buss, senior research analyst at the nonpartisan Citizens Research Council, holds no political benefit for Detroit.

    “That becomes a pure political fight — does Detroit have the power to retain the system?” she said. “Does Detroit have the power to stop it?”
    In a report last year on the city’s fiscal condition, Buss wrote that the water department is the city’s most valuable asset, should the city’s financial situation deteriorate to the point where a sale would become desirable.
    But it’s hard to put a price tag on the system, she said. Suburbs buying into the system would likely finance that through bonds that would be paid by customers through rate increases.
    In addition, funds to improve the system after a theoretical sale also would be paid for with bond proceeds.
    “Is either the city’s deficit and cash position so bad, or is there something the city wants so desperately that it needs to sell this asset, and can suburbanites be convinced that control of the system is worth the increased cost?” Buss asked.

    The 10-page report from the nonprofit Citizens Research Council of Michigan comes as many communities across Michigan — including Ann Arbor — are considering city income taxes to close multimillion-dollar budget shortfalls.

    “You can’t blame cities, they just got caught (in the stock market crunch),” said Bettie Buss of the independent Citizens Research Council of Michigan. Buss, who authored a 2009 report on local and state pension plans in Michigan, said cities have been tossed about by an array of negative trends: the stock market collapse in 2008, the continuing large increases in health care costs, longer life-spans for retirees and a shrinking number of active employees to help support a growing number of retirees.

    In his State of the State Address, Governor Rick Snyder proposed offering incentives to encourage local governments to share services. Eric Lupher is the Director of Local Affairs for the Citizens Research Councilwhich analyzes public policy. He says police and fire protection is where local governments spend most of their money. But Lupher says consolidating public safety services is a tough sell to citizens who want to know that there be a quick response in case of an emergency.

    As the Citizens Research Council has explained, truth in sentencing is a primary reason the average prison stay in Michigan is much longer than in comparable states. A recent Senate Fiscal Agency report notes that by contributing to the aging of our prisoner population, truth in sentencing also drives up health care costs.

    “We would see major changes on the spending side, if it were all dealt with on the spending side,” says Craig Thiel, with the non-partisan Citizens Research Council of Michigan. “I don’t think you can get rid of a $3 billion shortfall through just efficiencies in the state government.”

    Suggesting, Thiel says, that the most likely budget solution will involve a mix of cuts and increased revenues.
    Otherwise, the state would see major cuts to universities; payments to doctors; health care subsidies for low-income families; revenue-sharing with local cities and towns; and corrections funding, meaning potentially fewer prisoners incarcerated.

    Jeff Guilfoyle and Craig Thiel of the Citizens Research Council of Michigan are very knowledgeable. And a lot of the economists I like are at Michigan State University, the University of Michigan and Wayne State University.

    Jeff Guilfoyle, president of the nonpartisan Citizens Research Council of Michigan, said the state’s budget would have been balanced for a while in the wake of the 2007 tax increases “had we not hit the national recession of 2009.” General-fund revenue that in 2008 had risen 12.5 percent, in 2009 dropped 22 percent, he said.

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  • Permission to reprint this blog post in whole or in part is hereby granted, provided that the Citizens Research Council of Michigan is properly cited.

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