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Gov. Whitmer’s new budget bails out 24 struggling Michigan cities

Municipal leaders from Battle Creek to Lansing are welcoming a budget plan from Michigan Gov. Gretchen Whitmer that would allocate $70 million to bail out 24 cities hit hard by decreasing income taxes from the pandemic.

In Michigan, 24 cities rely on income taxes to comprise 25 to 33 percent of their annual revenue. 

Some had to lay off workers last year because state law doesn’t allow municipalities to collect local income taxes on unemployment or from employees who worked outside of their jurisdiction. 

During the pandemic — which drove up unemployment rates to an annual average of 10.2 percent from January to October, and forced many to work remotely — many cities faced tight strains on their budgets. 

Local income taxes fell 20 percent in Lansing and delivered a nearly $8 million hit to the city’s budget, while Battle Creek had to lay off 26 employees because of decreased taxes.

Whitmer’s budget director, David Massaron, said the $70 million “doesn’t come close to making up for (the cities’) revenue loss. But Battle Creek City Manager Rebecca Fleury said the payments are a “huge relief.”

The support would come at a time when many are relying on local governments to provide essential services related to the pandemic. 

The cities are drawing up permits for local businesses to expand their outdoor dining. Municipal ambulances are responding to community members’ health crises, said Chris Hackbarth, the director of federal and state affairs at the Michigan Municipal League. 

Whitmer’s budget proposal includes several other measures that city officials said would help respond to the economic fallout: 

  • $300 million to repair 120 local bridges
  • $10 million for domestic violence and behavioral health crisis response training for public safety officials
  • $5 million in grants for local public safety recruiting and training
  • $40 million for shoreline communities to patch up water infrastructure in response to climate change

Here’s which cities would receive money for lost income taxes: Albion ($168,500); Battle Creek ($2.8 million); Benton Harbor ($273,100); Big Rapids ($349,600); Detroit ($25 million); East Lansing ($2.2 million); Flint ($2.59 million); Grand Rapids ($17 million); Grayling ($104,311); Hamtramck ($498,900); Highland Park ($448,800); Hudson ($86,900); Ionia ($406,300); Jackson ($1.6 million); Lansing ($6 million); Lapeer ($554,900); Muskegon ($1.4 million); Muskegon Heights ($165,900); Pontiac ($2.3 million); Port Huron ($1 million); Portland ($140,500); Saginaw ($2.2 million); Springfield ($169,800); and Walker ($2.1 million).

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