The Center for Local, - FISCAL HEALTH - State, and Urban Policy

Ford School of Public Policy | University of Michigan April 2024 The Fiscal Health of Michigan Local Governments 2021 - 2022 Executive Summary Following local government’s unprecedented responsibilities as first responders to the COVID-19 pandemic and their subsequent infusions of aid from the federal government, it is essential to check in on the fiscal health of Michigan’s local governments. [...] General Fund Margin The general fund margin ratio measures how net revenues (revenue - expenditures) compare to total revenues for the general fund - in other words, it is analogous to the general fund’s “profit margin.” Of course, it is not the goal of government to achieve high margins and earn profits, but municipalities are required to balance their budgets so it is fiscally responsible to ens. [...] Figure 2 General fund balance margin by jurisdiction type 8 FISCAL HEALTH PROJECT General Fund Balance Growth A similar way to assess the budgetary solvency of a government is to calculate how the surplus/deficit for the year compares to the overall fund balance at the beginning of the year. [...] General Fund Margin The general fund margin ratio measures how net revenues (revenue - expenditures) compare to total revenues for the general fund - in other words, it is analogous to the general fund’s “profit margin.” Of course, it is not the goal of government to achieve high margins and earn profits, but municipalities are required to balance their budgets so it is fiscally responsible to ens. [...] The median ratio of long-term liabilities to revenues for counties was around 0.29 to 0.36, nearly triple the ratio value when only debt is included, implying that for the median county, pension and OPEB liabilities comprise around two-thirds of the overall burden of long-term liabilities.