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Original article URL: http://bridgemi.com/2013/05/guest-commentary-new-revenue-sharing-model-shortchanges-and-infuriates-municipalities/

Guest commentary

Guest commentary: New revenue-sharing model shortchanges and infuriates municipalities

By David Lossing/Michigan Municipal League

stress logo 5-16The Economic Vitality Incentive Program, a.k.a. EVIP, has been around for a couple of years now. EVIP is a program created by the state in 2011 to eliminate statutory revenue sharing and replace it with an “incentive” based program with only two-thirds of the previous funding.

Under the program, local communities are supposed to be able to “qualify” for EVIP funds by complying with certain criteria. This follows nearly a decade of massive cuts totaling over $6 billion that have been made by the Legislature and the governor to local revenue sharing funds.

So what have we learned? Is it working? Are our citizens benefiting from the time and resources being invested into this program by our local governments and by the state? In a word: No.

At the Michigan Municipal League’s annual Capital Conference, the session on EVIP was easily the most volatile of the two-day event. To put that in perspective, we also had a session on the recent repeal of the personal property tax, which was the biggest tax policy change in over a decade.

David Lossing is mayor of Linden and president of the Michigan Municipal League.

David Lossing is mayor of Linden and president of the Michigan Municipal League.

People are angry over EVIP because it isn’t working. An entire bureaucracy has been created to provide an “incentive” to be more efficient. In my view that’s a bit of an oxymoron.

As you would expect from any government bureaucracy worth its salt, there are people in the back office creating rules to attempt to manage the program. You may be asking, what kind of important policy questions are being asked by the state to make sure we are all in compliance? For example, several communities were contacted because the state wanted to know, “When was the first time you ever spoke about your consolidation idea?” And why did they ask that? Because the law requires a timeline. Without knowing the exact date, the communities think they cannot be in compliance. Now that is bureaucracy at its finest.

To receive EVIP funding, communities must post their financial and related data on their websites. So at least the public is being given access to information, right? On face value you might think so, but upon closer inspection it seems counterproductive at best.

First of all, there isn’t any information available now that wasn’t always available in some other form. But now that we have this new bureaucracy in place, clearly people are taking advantage of the resources being expended, right? Well, the League did an impromptu survey of our members after our EVIP session to ask that question: How many people are viewing your EVIP information online?

Farmington Hills, a community of over 80,000 people had ZERO hits to their EVIP-related website data last year, as did six other communities. Birmingham had almost 174,000 visitors to their city site, but only 83 visited the EVIP pages during the same time frame. That is an astonishing 0.048 percent. The city of Wyoming, with over 70,000 residents, had 235 views in 2012. Novi, with a population of over 55,000, has had 25 visits this year. The city of Adrian had 11 hits to their EVIP page, which is less than half as many that sought out information about the city’s sculpture.

So I ask this question: Is this what EVIP was intended to do? I think not. If the goal was efficiency and better government, we have lost our way and instead managed to create a new bureaucracy, and add cost and inefficiency. But we should ask ourselves, is the return on our investment such that it negates the new problem we have built? In my view this is not spurring incentivizing vitality, it is applying a one-size-fits-all-approach to the services that matter the most.

Bridge welcomes guest columns from a diverse range of people on issues relating to Michigan and its future. The views and assertions of these writers do not necessarily reflect those of Bridge or The Center for Michigan.

5 comments from Bridge readers.Add mine!

  1. Tom Ivacko

    Mayor Lossing’s information corresponds closely to recent findings from UM’s Michigan Public Policy Survey on citizen engagement with Michigan’s local governments. In the MPPS, we asked local leaders all over the state about 20 different kinds of strategies, tools, etc. they use to try to engage their citizens in local governance activities. We also asked how effective they think each of these approaches is. Most approaches were rated as effective by those jurisdictions that use them. However, the only strategy that was rated as effective by less than 50% of local leaders is the use of performance dashboards. Most local leaders who use dashboards just don’t think they help engage citizens.

    This also corresponds to our earlier MPPS survey on EVIP (http://closup.umich.edu/files/mpps-evip-dashboards.pdf) that found most of Michigan’s local leaders question the efficacy of dashboards in terms of improving accountability and transparency, and in terms of improving local jurisdictions’ overall performance. Common concerns identified by local leaders included issues about the measures included in dashboards, lack of resources in local governments to create and maintain dashboards, and skepticism that dashboards would be used by citizens.

  2. Charles Richards

    It may be true, as Mr. Lossing says, that “First of all, there isn’t any information available now that wasn’t always available in some other form.” But the information is more readily accessible now. It is unfortunate that more people don’t have enough interest in their civic affairs to utilize the information, but it is early days. Let’s see what happens as citizens become more familiar with what is available.

    Mr. Lossing has many complaints about bureaucracy, but he didn’t provide any information about how successful (or not) communities have been in qualifying for funds under the Economic Vitality Incentive Program. What percentage of the available funds do most communities obtain?

    1. Chuck Fellows

      The state does not disclose recipient information on its EVIP web page and a Google search for EVIP payments does not provide any information.

      This dashboard idea was tried years ago in the private sector and it has faded away like all other bogus ideas.

      EVIP is a program to do away with constitutionally required revenue sharing – its a gimmick to get around the law.

  3. Ray Byle

    The primary reason this state program was started was to save money. Under the guise of promoting competition for better government, the governor and legislature has slash funding to local governments. They have used the same strategy for public schools.

  4. JRS

    Ask the average citizen what they think about EVIP and they will have no idea what you are talking about.

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