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June 9, 2020

MSU and partners develop COVID-19 Fiscal Strategy and Resource Guides

The COVID-19 crisis is having a dramatic impact on Michigan's local governments, and the fiscal implications — including emergency spending, revenue losses and budget cuts — are already being felt. The Michigan State University Extension Center for Local Government Finance and Policy and Michigan State University Extension, or MSUE, are partnering with the Center for Local, State, and Urban Policy at the University of Michigan Gerald R. Ford School of Public Policy as well as other public finance experts from universities, consulting firms and research institutions from around the state to produce fiscal strategy memos and guides to assist local governments in navigating the new environment. 

The first four resource memos cover:

  • Guidance on available funding for local governments, eligible expenses and budget strategies for using federal CARES Act funds.
  • Tips to increase liquidity and strategies for short- and long-term fiscal sustainability.
  • Key considerations, decision-making processes and proven strategies for managing operating expenses and spending cuts.
  • The potential effects of the pandemic on property taxes. 

“The guides provide not just up-to-date information but a set of ideas and tools to help local governments strategically navigate the new fiscal landscape,” says Tom Ivacko, CLOSUP interim director. 

Stephanie Leiser, lead of CLOSUP’s Local Fiscal Health project, says, “This crisis, combined with the ongoing municipal funding challenges in Michigan, will require an even greater effort on behalf of local officials and administrators to quickly assess resources, respond to changing policies and legislation and develop the tools and insights to maintain sustainable operations and budgets.” 

As this crisis continues, additional federal and state legislation and policies will be implemented, all of which impact how locals respond to COVID-19. The guides will provide resources for locals to help navigate these changes.

“Locals are already challenged to provide front line services to cope with this unprecedented, fluid situation, said Shu Wang, assistant professor at the Department of Agricultural, Food, and Resource Economics. "With revenue losses inevitably on the horizon, these local governments are now expected to do more with less. By scholars and practitioners sharing information and collaborating on projects, local officials can make more informed decisions, enhancing efficiency, equity, and sustainability of public service provision.”

The guides will give clarity to local officials, especially regarding which federal relief funds can be used for different expenditures, the differences between various types of federal relief, and how to go about applying for those funds. This is vital to putting these local governments in the best position possible to protect their communities and weather the economic downturn.

This initiative is dedicated to bringing resources from MSU to Michigan communities, said MSUE state specialist Eric Walcott. “In non-crisis situations our government and community vitality team helps locals incorporate long-term planning and strategic goals into their budget process. We hope these resources are useful in helping local governments adjust to the current reality while making decisions that reflect their long-term goals and priorities.”

By: Samantha Zinnes

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