Over the next few days we’re going to hear a lot about Michigan, the comeback state.  About how, after over a decade of economic decline, our state is on the rebound, retaining and attracting small and large companies, and creating jobs.  We’ll hear about how we have a $500 million rainy day fund and a projected surplus of nearly $1 billion. And we’ll hear a lot about how this was achieved by an administration that has received accolades across the country for their financial wizardry at getting it done.  Yes, there will be lots of hand shaking, back slapping and a general declaration of victory.

Of course there are always two sides to any story and the other side of this one provides a stark contrast in reality. For instance, ask economists of any particular stripe and they’ll tell you that Michigan’s economic recovery has largely been accomplished on the foundation of the auto bailout.  And the dirty little secret is that it’s also been accomplished by the shift and shaft budget prowess of those who make such decisions, moving money away from various areas like funding local government services, education, and other services to fill budget gaps and fulfill other priorities. And that all comes at a price.

The reality at the local level is the one I’d like to focus on for a moment. I’ve heard it said time and again that all local government officials and administrators need to do is share services more, get a handle on pension costs, and forecast and plan better.  That’s tough to do when the partnership between state and local governments to provide local services has been broken. Over the past 12 years, payments to local governments have been slashed by a cumulative amount of $6 billion. That’s right $6 billion. Couple that with the loss in property tax revenue that communities are still recovering from due to the financial crash of a few years ago, along with the fact that our state limits the ability of locals to raise their own money, and the picture becomes more complicated.

The reality is that our municipal finance system, or that system which funds local services, has been broken for some time.  And while there will be those declaring victory, the fact is that there are more local units on the state Department of Treasury fiscal distress watch list than at any other time in this state’s history. People can blame local officials for that all they want, but it’s only because of the work by local officials that there aren’t more communities in bankruptcy.

So before we go about declaring victory, let’s remember there is still a lot of work to do to ensure Michigan’s economic recovery is long-term and sustainable and not just made into a platform for term-limited politicians seeking to declare their legacy as having fixed the place.