Research

MSU Research Highlights Challenges Facing Michigan Cities

buickcityflint
The site of a now-demolished auto factory in Flint, a city that according to a new paper by MSU researchers has been affected by state regulations that limits cities’ options for dealing with fiscal distress.

Photo by User Blueskiesfalling on en.wikipedia (Own work) [Public domain], via Wikimedia Commons

As Detroit and several other cities in Michigan have fallen into fiscal distress and bankruptcy, the state has received national and international attention for its emergency manager policy. With a grant from the C.S. Mott Foundation, a team of MSU researchers led by MPP faculty Joshua Sapotichne and affiliate faculty Eric Scorsone set out to find out why so many Michigan cities were facing distress and how that compared to cities in states across the country.

What they found, in the paper “Beyond State Takeovers: Reconsidering the Role of State Government in Local Financial Distress, with Important Lessons for Michigan and its Embattled Cities,” is that Michigan makes life hard for its cities.

Josh Sapotichne, lead author of the paper and co-principal investigator, notes, “State policies, including labor laws and tax limits, make city management more difficult. Our research shows that the cities of Michigan are, in fact, among the hardest to manage in the country.” He adds, “What we hear about distressed cities like Flint doesn’t tell the whole story. Some cities have made management mistakes or had poor leadership, but that’s not the entire reason they have fiscal trouble. State policies create a web of rules that can help cities succeed or set them up to fail, and Michigan has created a particularly difficult environment for cities.”

When the state intervenes in distressed cities, as it has in Flint, the near-term focus on balancing the budget can produce additional issues over the long term. “You can see an example of how a state’s policy design influences local residents in the Flint water crisis. Michigan empowers an emergency manager to prioritize short-term fiscal solvency over all other demands,” said Sapotichne. “New Jersey, Pennsylvania, and other states show that there are alternatives to hyper-austerity.”

The team acknowledges that neither the state nor cities can change their conditions overnight. “There is no simple fix for Michigan’s cities. We hope that our research calls attention to the impact Michigan’s local government finance system has on the ability of all cities to stay healthy and that decision-makers keep that in mind as they consider new policies and legislation,” noted Erika Rosebrook, Political Science Ph.D. student and co-author of the report. “It’s not simply bad decisions or legacy costs that create a distressed city—it’s important to recognize that the State plays a role as well.”

This research provides important opportunities for MPP students to learn about the reality of government policy and academic research. “MPP students have been and will continue to be critical to the project’s success,” Scorsone said. Sapotichne, who teaches the MPP Capstone seminar, Scorsone, who instructs a course on distressed local governments, and Rosebrook, who uses her experience in Michigan’s public sector to assist the MPP program, each cited the important work of MPP students Daniel Casey-Dunn and Marcus Coffin, who have received funded research assistantships to, among other key tasks, help collect and code critical data, interview government officials, and support a national meeting of state officials responsible for intervening in distressed cities.

The work has been highlighted recently in Bridge Magazine, MIRS (subscription required), Michigan Radio, Moody’s, and the Detroit Free Press. The next portion of the project, supported by continued funding from the C.S. Mott Foundation, will focus on refining the state-level comparison and examining in more detail how Michigan’s policy environment and local conditions will  affect Flint’s future.

For more information:

Beyond State Takeovers: Reconsidering the Role of State Government in Local Financial Distress, with Important Lessons for Michigan and its Embattled Cities, Joshua Sapotichne, Erika Rosebrook, Eric Scorsone, Danielle Kaminski and Mary Doidge

The Flint Fiscal Playbook: An Assessment of the Emergency Manager Years (2011-2015), Mary Doidge, Eric Scorsone, Traci Taylor, Joshua Sapotichne, Erika Rosebrook, and Danielle Kaminski

carrot_stick

According to the paper, Michigan legislation relies more on “sticks” than “carrots” in the way it deals with municipalities that are experiencing fiscal distress.

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