Michigan

Review of Public Administration

Study Visits

Study visit to Michigan

Background

Michigan is one of the fifty states that make up the United States of America and because of the federal nature of the government has a considerable degree of political freedom and operates in an environment wherein governmental power is authorised by the people through the electoral process. Michigan has opted for a degree of electoral accountability, which is significant, resulting in the state having the 14th highest number of local units of Government among the 50 states. The majority of which are directly elected.

There are two major categories of local government with overlapping boundaries and sometimes service delivery responsibility and tax raising capabilities. In total there are 2,844 local units of government in Michigan. This covers a population of 10 million. The total cost of service is $39 billion. (£23,4000 million)

State government in Michigan employs more than 62,000 people, which is 1.5% of a total of 4.2 million working population. Local government workers including teachers are five times that number

Distribution of state employees
Corrections 29%	Transportation 5%
Family Independence Agency 21%	Consumer and Industry Affairs 6%
Community Health 10%	Natural Resources 4%
State 4%	Other 16%
State Police 5%

Source: State of Michigan, Senate Fiscal Agency 2001-02 Fiscal Digest

The state government has a considerable degree of freedom from the federal government but operates in an environment where considerable funds are allocated by the federal government and then further deployed by the state administration. The State government has three main constituent elements.

Legislature-----Administration-----Judiciary.

The Governor is the most powerful figure in the administration and ensures the delivery of the services of which the state has responsibility. The state actually delivers few of the public services as these are left to the levels of local government to deliver. One of the most significant services to be delivered is the regulation of insurance companies. The state has tax raising powers in common with the federal and local government tiers.

The Legislature has responsibility for passing legislation and scrutinising the activities of the administration. In the last decade the state has imposed term limits for those who sit in the legislature, which is bicameral. This has created a problem in that the most senior legislators have now moved on to other things and there has been a loss of some of the intellectual capital and corporate memory within the system.

Most of the public services are organised and delivered by the local government tiers, which are set out below.

Constitutional position of local government

Michigan local government has a constitutional basis going back to the creation of the United States and the North West Ordnance of 1787, which is based on the principle that government should be close to the people. There is a constitutional requirement for local government entities to exist and they are based on geographical boundaries of townships, which have a geographical mass of 6 square miles based on the travel distance of horses. Each county has six townships. Local government in Michigan has four main features.

Michigan has a large number of local units.
The structure of many local units reflects the 19th century emphasis on a diffused executive function.
Townships because of urban movement of people are now exercising powers previously exercised only by cities.
While the property tax remains the mainstay of finance a shift towards state funding has increased. More than half the revenues of townships derive from state or federal allocations.

There are two main categories of local government. Neither is a sovereign entity and derives all their powers from the constitution and the laws of the state. The principles of Home Rule and local control simply refer to the degree of independence granted by the State.

General-purpose government, which include counties, cities, villages, and townships, provide a range of services in a number of functional areas. A citizen can live in a county and a city or township but not both. A township resident can also live in a village that has its own government but also remains a part of a township. Michigan has the 7th largest number of general purpose Units in the USA.
Special purpose units of government which include local school districts, intermediate school districts, community college districts, regional planning and development districts and special authorities and districts in Michigan are limited to provision of the services for which they are authorised. In many areas of the state single special service such as transportation, recreation or water supply.

The Michigan constitution has provided for a system of Home Rule for counties and Municipalities and this has been interpreted in the Courts that

"home rule cities enjoy not only those powers specifically granted, but they may also exercise all powers not expressly denied. Home rule cities are empowered to form for themselves a plan of government suited to their unique needs and, upon local matters exercise the treasured right of self governance"

City of Detroit Walker 520 N.W/ 2d 133 (Mich 1994)

Finance

Michigan local governments place a heavy reliance on property taxes as a source of local revenues. In response to the inevitable increasing tax burden on property owners the State government has intervened on two fronts, the introduction of tax limitations and the increasing use of state aid, and the introduction of other means of taxation for local government units such as local sales taxes, hotel room taxes and even local income tax. However the take up of these additional tax sources has not been significant and there is still a heavy reliance on property tax.

There is within the constitution a taxation limitation of one and one half percent of the property’s assessed valuation (15 mills) for county taxation purposes. Operating millages imposed by any city village, charter county or other authority is excluded from the calculations. This results in some jurisdictions having property tax in excess of 50 mills. The constitution has been amended to allow electorates to adopt a limit of 18 mills. However the majority of counties have fixed an allocation of less than 18 mills.

The system of school board funding is also complicated. This was as amended in 1994 through Proposal A. Allocated operating millages for school boards were eliminated and the 15/18/50 mill limitations reduced by the amount of money each county allocated to schools prior to 1994.

The state of Michigan has a history of voter-initiated legislation in regard to the tax raising powers of municipalities. The most current of these initiatives, which effectively amend the constitution of the state, has resulted in three significant provisions for local government.

Local government protection against unfounded state mandates.

This prevents the state government controlling its own expenditure by shifting functions to local government. The state while maintaining it percentage contribution of services provided at the time of the amendment must also fully fund all new activities mandated of local government.

Requirement that local governments obtain voter approval to increase local taxes.

Local governments are prohibited from levying any new tax not authorised in 1978 or increasing the level of tax already authorised at that time, without the approval of the majority of the qualified electors of the unit of government.

Limit on the rate of growth of the tax levy resulting from increased in the assessed value of a local government.

There is provision that any increases in the total assessed valuation of property as finally equalised; excluding the value of new construction and improvements must result in a reduction of the maximum authorized rate applied by that local unit to yield the same gross revenue from existing property, as could have been collected as the existing authorised rate ion the prior assessed value.

A further refinement in 1994 included in a voter approved constitutional amendment known as Proposal A stated that the taxable value of any property cannot increase in a single year by more than the lesser of the rate of inflation in the previous year or five percent. Property is reassessed on transfer of ownership.

State Aid has increased in lower government financing. In 1997 state aid in the United States accounted for on average one third of a general spending , in Michigan it was 44% mainly due to the system of school funding. This level of funding has allowed the small local government units to exist longer than they may have been able to left to their own devices. This is particularly evident in school district organisation wherein consolidations are reducing after increase in school aid.

On average cities, villages and townships with populations less than 10,000 receive over 36% of their local revenues from state revenue sharing. When other state transfers are taken into account these percentages rise.

The Revenue sharing system between the state and local governments ensures that distribution of finance addresses local needs more efficiently. However, once the funds are allocated there are in theory, no constraints no how it is spent.

Functions of public administration in USA and Michigan

The structure of public administration across the United States varies from state to state due to the federated nature of the constitution and consequently it is only possible for this paper to address the issues from a Michigan perspective.

The structure of local government is based on the principles of home rule and power being close to the people.

Table 1. Responsibilities of respective tiers.

Federal

Foreign Policy and Defence
Public Order and Security
Judicial System
Macroeconomic Policy
Higher Education and Research
Highways and long distance transport and communications
Labour Market Policy and employment issues
Social Insurance and Transfer payments.

State government

Legislative
Regulatory

Local government

Local governments general purpose units of government
		Responsibilities including	Size of authority
Counties	83	Originally administrative areas of State Government, providing local services. Now empowered to deliver local non-state services. Mandated services include Conduct of elections Enforcement of state laws Administration of justice Care of prisoners Registration of property deeds Issue of birth certificates Construction and maintenance of county roads. Permissive services Parks and Recreation Water and Sewerage Solid Waste Disposal Planning and Zoning Airports Port facilities Libraries Hospitals Economic development
Cities	273	Mandated services include Property Assessment for county and schools Tax Collection for county and schools Conduct of elections Legal court systems (Cities could provide other services demanded by their citizens)
Townships	1241	Mandated services include Property Assessment for county and schools Tax Collection for county and schools Conduct of elections Legal court systems of limited jurisdiction Zoning powers Police and Fire Protection (not expected to provide much more than the above)	Average population 2100
Villages	262	No mandated services but available for communities wishing a higher level of service than townships could offer. Zoning powers Police and Fire Protection Tax Collection
Local governments special purpose units
Local School Districts	663	Provision of education services ranging up to Kindergarten to Year 12 although some are only up to Kindergarten to Year 6 or Year 8 including Preschool, Lifelong education Adult education, community education, training, enrichment and recreation programs for other persons.
Intermediate School Districts	57	Assist school districts and act as an intermediary between districts and state. May provide workforce development programs, job training, and school to work initiatives and woks first programmes.
Community College Districts	28	Alternative to freshman and sophomore years of college. No more than two years of collegiate or non-collegiate education.
Special Districts and Special Authorities	277	Limited purpose units covering services such as Airport Authorities Library Boards, Swimming Pools Joint Hospital Authorities, Mass Transportation, Soil Conservation, Irrigation, County Water, and Sewer and Garbage Disposal
Total	2884

Source: A Bird’s eye view of Michigan Local Government at the end of the Twentieth Century

The democratic nature of government in Michigan overlaid with the principles of Home Rule and keeping government "close to the people" has resulted in a degree of duplication that would be unusual in other jurisdictions. Table 2 reflects the duplicative nature of public services across the institutions of government within the State.

Table 2. Duplicative functions of levels of government in Michigan

	State	Local Governments
Function/Unit		Counties	Cities	Villages	Townships	Special Authorities	School Districts
Parks & Recreation	X	X	X	X	X	X	X
Libraries	X	X	X	X	X	X	X
Roads & Highways	X	X	X	X	X/+
Water		X	X	X	X	X
Sewerage	+	X	X	X	X	X
Police	X	X	X	X	X
Public Transport	+	X	X		+	X
Refuse Disposal		X	X	X	X	X
Refuse Collection			X	X	X
Fire			X	X	X
Corrections	X	X

The pluses (+) show a role in financing or regulating specific services. Each type of governmental unit with an "X" has the authority to provide that governmental service.

Source: A Birds Eye View of Michigan Local Government at the end of the Twentieth Century Citizens Research Council of Michigan

Key issues

Improving services

The financial stringencies that currently confront the Michigan government are assisting in a drive to improve the cost effectiveness of services. Each of the public sector bodies are undertaking a wide range of initiatives to improve the quality and cost effectiveness of services.

A major drive is underway to improve accessibility of services through EGovernment,. The Michigan state administration is seen as a leader in providing portals to the citizen to government services. These portals not only provide information but also allow transactions to be undertaken., Some of these transactions would include; permits and licence renewal and acquisition, booking reservations in national parks.

There are also opportunities for consolidation across municipalities to make services more cost effective although as alluded to earlier the increasing uses of state aid is preventing the natural drift towards economies of scale in preference to having more locally accountable services. There are three types of consolidation:

functional - which is service specific e.g. fire, police, emergency services
geographical - which ignores political or jurisdictional boundaries and focuses on service delivery and are used mainly for school boards.
political - entailing the merger of two bodies corporate into one jurisdiction last achieved in 1837.

The State has introduced the concept of revenue sharing to ensure a greater consistency in the level of service for all the population based on need.

The State Governors office has recently started a service called Constituent Services Division that attempts to connect citizens with government in a more effective way by providing a coordinating influence across the various government departments.

Regional Councils are also created to assist in the development of services which span political jurisdictions e.g. mass transport.

Enhancing democracy

The current constitutional arrangements in Michigan are predicated on the concept that that government should be close to the people. The large number of public organisations that have so many people elected assists in meeting that objective. However, the political system in America suffers from the condition found in most western democracies wherein the people feel estranged from the political process. The system in Michigan provides significant opportunities for citizens to participate in the political process but still there is a strong commitment to community action. The Community groups are funded through a variety of sources including state and local government to undertake specific projects such as Housing Development Commercial, Industrial & Business Development, Community Building, (non bricks and sticks).

Community Development Corporations assist in this process and enable communities to participate in public policy discussions.

Dual mandates are not allowed

Better governance

The system of government in Michigan because of its constitutional background provides a degree of freedom in relation to the internal organisation of municipalities and the state government.

County councils are allowed to adopt one of the following four structural formats of administration

General law

The general law model provide for a multi purpose commission and multi headed executive. The numbers on the commission depends on county population. Boards of commissioners have both legislative and administrative powers and duties. This system has resulted in a proliferation of appointed commissions and boards to deliver services. Administrative powers are shared with a number of elected officials. The executive power lies with the County Treasurer, county clerk, registrar of deeds, prosecuting attorney and a sheriff. These officials oversee their own domain and budgetary power lies ultimately with the Commission.

Optional unified with a manager or elected executive

This format addresses some of the problems in the general law system wherein there is a diffusion of executive authority, dissipation of legislative effectiveness and confusion as to accountability.

This option in effect abolishes all appointed boards, commissions, authorities and elective offices if they are not specified in statute. Commissioners are still elected under the same provisions of general law but this format provides the option of appointing as manager or electing an executive, which would have responsibility for most of the county agencies. Only an elected executive could veto commission actions. Because of their constitutional position the posts noted above still need to be elected. In addition the drain commissioner and board of county road commissioners are protected.

Charter counties

Charter counties are allowed to appoint an accountable executive while removing executive functions from the county board of commissioners. Powers of the executive are set out in the charter. This system resembles the strong mayor system used in many of the major cities in America, however the election requirements for the other major official posts remain. The charter itself has to be specific about the governance arrangements for the county.

Townships. The constitution also provides for the election of a township board comprising of a supervisor, clerk, treasurer and either of two trustees. The supervisor is in effect a town mayor. Charter Townships are not allowed to devise their own charter as would charter counties but are allowed to increase the number of trustees from two to four and to appoint a superintendent to serve as a chief administrative officer.

Cities and villages

The Michigan Constitution provides for Home Rule for cities and counties. The intention in allowing theses entities the opportunity to create their own charter formulating their own government was to attempt to make local government more responsive to the need of their respective populations.

Cities and villages have tended to use one of the following forms of internal governance

Weak Mayor and Council. This values representation over efficiency. Mayors are elected separately from other representatives for relatively short periods of time. They do not have veto powers. The council or the mayor with council approval makes administrative appointments. Some of the principal officers posts may also be elected. Councils exercise supervision through standing committees.

Strong Mayor and Council. Mayors are normally elected for four years, do not vote in council, have a power of veto have powers in relation to appointments, preparation of budgets and financial control. Council membership tends to be smaller, is elected at large, have fewer standing committees and primarily take on a legislative role. This format resembles a presidential or gubernatorial form of administration.

Council Manager. Councils are usually elected for four years with up to nine members and exercise both policymaking and administrative authority. The Mayor is elected from within the council and is in effect a chairman of the council with civic duties, although this varies. Financial and administrative control resides with a manager, appointed at the pleasure of the council.

These models are not mutually exclusive some municipalities are experimenting with variations of the formats to achieve forms of government which meet their own individual needs.

Special purpose units. Most of the special purpose units operate the Council Manager model of government

Source: ‘A Bird’s Eye View of Michigan Local Government at the End of the Twentieth Century.’ Citizen Research Council of Michigan. Report No. 326 August 1999.

Involving communities

The whole system in Michigan is based on the development and engagement of local communities. In fact a possible criticism of the system is that it is too local to achieve the types of economy of scale required of the public sector in the United Kingdom.

Community Involvement is also achieved through the use of the voluntary sector as set out in 6.1. It is interesting to note, however, that community and voluntary groups appear to have access to a large number of wealthy charities and foundations, thereby reducing some of the stresses on the public sector.

Community organisations experienced the same difficulties as Northern Ireland organisations;

Lack of skilled staff
Uncertainty and time limited nature of funds.

The open meeting legislation also assists in providing opportunities for community involvement.

Interestingly neighbourhood organisations are seen as the first step in the political career ladder.