ANN ARBOR – A poll released Monday by the University of Michigan’s Ford School of Public Policy found that 56 percent of Michigan’s local government leaders agreed that filing for bankruptcy was the right thing for Detroit to do. Even so, a similar percentage of those polled, 54 percent, said they thought the state’s reputation will suffer from the filing.
Out of 10 potential strategies for dealing with local government bankruptcy, only one had major opposition, the poll said: 51 percent of local leaders thought cuts to current retirees’ pensions should not be pursued during bankruptcy proceedings, including 15 percent who thought that route should never be pursued under any circumstances.
“From the southeast corner to the far reaches of the (Upper Peninsula), majorities of local leaders think Detroit’s fiscal health is vital to Michigan’s future,” Tom Ivacko, administrator and program manager for the school’s Center for Local, State, and Urban Policy, said in a statement.
Top cost-cutting strategies a jurisdiction should pursue during bankruptcy included increasing service sharing agreements with neighboring jurisdictions (79 percent), cutting or privatizing services (64 percent), raising revenue by selling assets (62 percent), and cutting compensation (pay and/or fringe benefits) for current employees (58 percent), the survey said.
And 43 percent of those surveyed expected costs to rise for other local governments to borrow money, and 41 percent thought the changes would increase that other struggling Michigan jurisdictions would end up in bankruptcy, too.
The responses came from the Michigan Public Policy Survey, which is a census of all 1,856 general purpose local governments in the state conducted by the Center for Local, State, and Urban Policy at U-M, in partnership with the Michigan Municipal League, Michigan Townships Association and Michigan Association of Counties.
The study was conducted October 7 through December 17, 2013, and involved surveys sent via hardcopy and the Internet to top elected and appointed officials in all municipalities in Michigan. A total of 1,353 jurisdictions returned valid surveys, resulting in a 73 percent response rate. The survey had a margin of error of plus or minus 1.4 percentage points.
