MISSION IMPOSSIBLE: MONITORING MUNICIPAL FISCAL SUSTAINABILITY AND STRESS IN MICHIGAN

• Published in: Journal of public budgeting, accounting & financial management accounting & financial management, 2013, Vol.25 (3), p.522
• Main Authors: Crosby, Andrew, Robbins, Donijo
• Format: Article
• Language: English
• Subjects: Budget deficits; Cities; Economic crisis; Government spending; Intergovernmental relations; Local government; Monitoring systems; Municipal finance; Peers; Public officials; Ratios; Recessions; Studies; Sustainability
• ISSN: 1096-3367; 1945-1814

The State of Michigan monitors annual fiscal progress and sustainability of municipalities using a 10-point fiscal indicator test. This test focuses primarily on a city's general fund and creates a fiscal scorecard, but the State's approach has limitations. Given these limitations, we propose that the State should consider eliminating certain indicators and replacing them with others that go beyond measuring the general fund and also modify others. Using 2007 through 2009 municipal data and some of the more common measures, we propose a 10-point system that monitors the entire government - governmental and business-type activities. This approach would improve monitoring fiscal sustainability-a city's ability to pay bills today, tomorrow, and beyond. In addition, we believe that such a system would provide a valuable tool to local public officials to assist in their decision making-something that has not occurred with the current system. In addition, by combining the merits of existing fiscal indicator systems with new indicators to create a theoretically robust system where one previously did not exist, we contribute to public administration both as an academic discipline and as a field of practice. [PUBLICATION ABSTRACT]