‘Feeling the Pinch’: How State Budget Cuts Impact Our Township

Your township is not unlike any other person or entity dealing with today’s economic realities—we’re all “feeling the pinch.” However, when it comes to making dollars stretch the furthest, townships have long been recognized for their efforts in minimizing expenses and maximizing value at the local level.

While township government is accustomed to tightening its belt, this latest round of state budget cuts, along with federal or state mandated requirements, is creating unprecedented challenges for townships, cities and villages. Demands on local government are increasing while the amount of funding is decreasing. This is wreaking havoc on budgets and causing local leaders to reassess priorities.

According to state statutes, Michigan townships are responsible for carrying out three main functions: assessing property, collecting taxes and conducting elections. Roads, other infrastructure, police, fire and emergency medical services, parks and recreation programs, libraries, and community centers require additional sources of revenue to operate. Services, programs and projects are funded by many other methods, such as cost-sharing with other governmental units, millages, user fees, grants and public borrowing (bonds).

Recent state budget cuts are impacting townships in different ways, based on several factors including: (1) if the township receives any statutory revenue sharing from the state (only one in six townships still receives any statutory revenue sharing); (2) what other revenue sources the township has in place; and (3) the township’s current budget, including its fund balance. Townships that still receive statutory revenue sharing are being impacted the most. In Odessa Township, we are dealing with budget cuts by doing less road maintenance, one rather than two brine applications on the gravel roads, and tight budgeting in all departments.

Townships, which have a tradition of using funds wisely to benefit their communities, will continue to seek innovative, cost-effective ways to carry out essential functions. However, the bottom line remains: You can only do so much with so little. Further cuts, coupled with declining property values, will challenge how local governments—the form of government closest to the people—continue to best serve those whom they represent.