Revenue Sharing for Michigan Counties Remains Stagnant

The State of Michigan has consistently disinvested in local government by providing less and less in revenue sharing. Cities, townships, villages and counties all rely on this funding to address there budget needs. But, since 2002 the State has withheld more than $8 billion. We have discussed the loss of revenue sharing-both constitutional and statutory-for the local municipalities, however we have not explored revenue sharing at the county level. Unlike cities, townships and villages, counties do not receive constitutional revenue sharing but rather only statutory revenue sharing. The chart below shows data from the Department of Treasury, which reported on the amount of revenue sharing each county received since 2013. The 2020 number below is the expected amount each county is to receive for fiscal year 2020.

According to the State Revenue Sharing Act of 1971 counties are to receive between 21 and 25 percent of sales tax revenue at the 4 percent rate. That changed for a short period of time when in Fiscal Year 2004-05 revenue sharing payments to counties were temporarily suspended. At that time counties were required to create a reserve fund with their own general fund dollars; counties were then allowed to withdrawal funds in lieu of the state revenue sharing funds that were not being dispersed, according to the Senate Fiscal Agency. Once a county exhausted its reserve fund then it could again become eligible for state revenue sharing funds. To add to that, in 2013 counties also became eligible for County Incentive Program Funds; 20 percent of a counties revenue sharing was based on eligibility in this program. These funds are allocated if a county meets certain transparency and accountability standards set by the State.

As the chart shows above, there has not been a serious increase in county revenue sharing since 2015, and between 2014 and 2015 Wayne County received the largest increase of about $10 million. This increase did not come from the County Incentive Program Funds, which accounted for about $10 million in 2014 and 2015, but from its statutory funding. In 2014 Wayne County received about $40 million in revenue sharing and in 2015 that increased to about $50 million. For Fiscal Year 2020 Wayne County it was proposed Wayne County receive about $52 million in revenue sharing, a small increase from its $50 million appropriation in 2015. In 2020 Wayne County’s revenue sharing payment is to be eligible to be $42 million from statutory funding and $10 million from the County Incentive Program. 

Another item to note is how Oakland County did not receive revenue sharing in 2013 and 2014. According to the data Oakland County was not eligible for any type of revenue sharing funding in either year. Although no specific information was available as to why, it could have been that the County used its reserve funds by 2013 and was not eligible for restored funding from the State until 2015.

One of the components of revenue sharing formulas is population, which is reflected in the amount of funding each county received in the chart above. Wayne County has the largest population, which is why it has consistently received the highest amount of funding and counties like Monroe and St. Clair or more rural with more lower populations and lower funding amounts.

Overall, the chart above show how revenue sharing for counties in Southeastern Michigan (and at a greater level, across the state) has remained stagnant for several years. The stagnation, and loss, of revenue sharing funds directly impacts that services a county provides. According to the Michigan Association of Counties, counties have lost $2.4 billion in revenue sharing funds. Additionally, in 2019, cities, townships and villages received more than $1 billion total in both constitutional and statutory revenue sharing funds and counties received $221 million in statutory funding. We will also look

Fertility Rates in Michigan Continue to Decline

Fertility rates in the United States and in Michigan have been steadily declining. According to the Michigan Department of Health and Human Services, since the year 2000 fertility rates in the U.S. peaked at 69.5 births per 1,000 women of child bearing age in 2007. Since then the rates have continued to fall. Between 2011 and 2016 the fertility rate hovered between 63.2 and 62 before dropping to 60.3 in 2017 and 59.5 births per 1,000 women of child bearing age in 2018. In Michigan, the fertility rate has consistently been lower than that of the U.S., but it too has been on the decline. Since the year 2000 the fertility rate peaked in 2000 at 63 births per 1,000 women of child bearing age. Up until 2009 the fertility rate fluctuated between about 62 and 60.5, then in 2009 the rate dropped to 58.8 births per 1,000 women of child bearing age. Between 2013 and 2016 the fertility rate again increased to about 60 births per 1,000 women of child bearing age  before again dropping to 59.5 in 2017 and 58.5 in 2018. In raw numbers, in 2018 there were 110,293 births in Michigan, the lowest number since 1941.

According to a recent New York Times article, fertility rates tend to decrease with economic downturns. This happened with the Great Depression and then again with the Great Recession in 2008. However, while fertility rates rebounded following the Great Depression this has yet to happen following the recent recession. Stable fertility rates are important as they help ensure there will be a healthy workforce to keep the economy moving and to care for the elderly populations.

Below is a chart detailing the fertility rates for all of the seven counties in Southeastern Michigan in 2018, along with the rate for the State of Michigan and the City of Detroit. The only county to have a higher fertility rate than the State was Wayne County. In 2018 the fertility rate for Michigan was 58.5 births per 1,000 women between the ages of 15 and 44 and for Wayne County the fertility rate was 66.2; the City of Detroit had a fertility rate of 70.2. Washtenaw County had the lowest fertility rate at 40.5 births per 1,000 women between the ages of 15 and 44. One possibility for the low fertility rate in Washtenaw County is the fact that the county is home to the University of Michigan. With such a high college population, where the typical age is concentrated in the lower 20s, it is quite possible that the fact that fewer women in their 20s are having children contributed to the county’s low fertility rate.

In addition to publishing fertility rate data by county, the Michigan Department of Health and Human Services also publishes it by race. Below is the data for the year 2018 by county for white women. The fertility rate for white women in Michigan in 2018 was 55.2 births per 1,000 women between the ages of 15 and 44, and Wayne and St. Clair counties were the only two in the region with higher fertility rates. Wayne County had a fertility rate of 58.7 in 2018 and in St. Clair County the fertility rate for white women between the ages of 15 and 44 was 57.8. White women in the City of Detroit also had a fertility rate higher than the state; Detroit’s fertility rate per 1,000 white women between the ages of 15 and 44 was 57.9.

The fertility rate for black women in 2018 in Michigan was 67.6 births per 1,000 women between the ages of 15 and 44. Again, there was a higher fertility rate for black women in Wayne and St. Clair counties than at the state level; those rates were 71 and 70.7, respectively. The City of Detroit also had a higher fertility rate than the state at 69.2. A fertility rate was not available for Livingston County.

It should also be noted that the fertility rate for black women in the State of Michigan and across the counties in Southeastern Michigan was higher than the fertility rates for white women in the region and at the state level.

As fertility rates decline it is also important to understand that there seems to be a shift in the age women are choosing to have children. According to the same New York Times article, at the national level, fertility rates have declined the most among teenage women; the fertility rate for teenagers has declined 70 percent since 2001. Women in their 20s are also having fewer children, despite this age group traditionally having the highest fertility rate. In 2016 it was women in their early 30s who had the highest fertility rate. By 2018, the only age group that experienced an increase in fertility rates was women in their late 30s and early 40s.  Also, according to the article, more than half the women in the U.S. who had children in their 30s had a college degree; this was more than the amount of women in their 20s with children and college degrees. There is a belief that women are waiting longer to have children to ensure their financial stability, career trajectory and that they have enough resources to provide for their children.