Local budget process needs more community input

Michigan communities are governed by a law designed to establish a consistent process to regulate the financial management of local units of government. However, the Act does not require any more additional public involvement than a single public hearing.

The local units of government in Michigan manage their financial affairs in accordance with the Uniform Budget and Accounting Act of 1968. The state’s goal is inherent in the name of the Act, to create uniform budgetary systems across the state and to ensure responsible, deficit-free spending.

The act defines the uniform chart of accounts to be maintained and uniform reports and reporting processes. It defines audit requirements and explains the state’s process to address violations. Many other issues related to municipal finance are addressed. Unfortunately, language about public participation is limited to a public hearing and making budget information available for public review and inspection.

The financial stresses of local units of government will inevitably lead to more mileages put up for voter approval. Some have been successful in generating new revenue for such units as police and fire. Increased participation of residents in the budgetary process may improve support for such revenue streams. Well-informed voters can understand the reasons for declining local budgets and reductions in service delivery. They can participate in a process that allows them to understand the sources and uses of government revenue.

Local units of government can develop a process where they allow residents to participate throughout the process through a series of budgetary town hall meetings. Such a process will educate local residents of the fiscal challenges and limitations governmental units face. So, when extra revenue is needed for a defined period of three to five years, a conversation with the very people who will need to tax themselves may prove beneficial, especially if that conversation occurs long before a millage increase is placed on the ballot.

For more information about municipal budget and finance visit the Michigan State University Extension Find an Expert page.

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