The Chelsea Standard
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State township executive director worries that only townships are being targeted
PUBLISHED: January 31, 2008
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Cost efficiency
Michigan Township Association Executive Director Larry Merrill isn't necessarily against consolidation and regional efforts in a broad sense, but worries about this effort to bring attention to the issue and whom it targets.
"The premise that townships need to be singled out for shock and awe ignores that townships are very involved in collaborative agreements," Merrill said. "Instead, what units of government ought to be looking at is where there are economies of scale, such as capital services including utilities, water and sewer."
As an example, he cites the Detroit Water and Sewerage Department, which reaches far beyond the city's urban borders to provide water and sewer service to four million people in 126 communities.
A good example of governmental consolidation, Merrill said, exists in the Upper Peninsula, where a cluster of five communities that originated around a cluster of once operational mines have adjusted to the times.
With the shift from industry to commerce — Iron River is the commercial center of Iron County — Iron River, Mineral Hills, Stambaugh, Caspian and Gaastra formed one government, having been forced to by the nearly complete disappearance of the industry that spurred their settlement in the 1800s.
"It's not something you just pass a law and make happen," Merrill said. "There are a number of communities in southeast Michigan where the tax bases have shrunk and their financial ability to support locally produced and managed services is harder to do. Local officials will react on their own during the budgetary process."
Merrill said the state could support local studies with grants, ensuring township officials have the knowledge to make their own decisions more wisely.
In the case of townships, many functions are already provided at the lowest cost, compared to other units of government.
"The officials and employees who make those functions make $12,000 per year and work in excess of what they are compensated for, making them, largely, volunteers," Merrill said. "The counties do not have the capacity and studies show that the more work a county takes on, the more they have to raise wages to accordingly compensate their employees to deal with the additional complexity that comes with rolling townships functions and services into the county's framework."
The Michigan Township Association commissioned a study of the areas addressed in the consolidation act. Researchers working in Michigan State University's State and Local Government Program looked at elections, tax collection and property assessment. Property assessment appeared to be the only area that could be properly studied in a meaningful way because of all of the variables in election administration and tax collection, said Eric Scorsone, co-director of the program.
"I don't think elections and tax collection consume a significant portion of any township's budget," Scorsone said. "Many election functions are embedded in the clerk's office and they are handled largely by volunteers."
Assessment was probably the most expensive and easiest to study, he said.
Scorsone said that the study determined that 508 townships surveyed, or 40 percent of townships in Michigan, spend $14.6 million to provide assessment services, while just 19 of the 32 counties surveyed would spend $16 million to provide the same services. There are 83 counties in the state.
"I think that clearly there is not cost efficiency," Scorsone said. "There might be a better assessment process, but we didn't look at that. The argument has been made that a better process might produce a better outcome, but I don't know if that is true."
Scorsone also called into question a potential conflict of interest having property assessment handled by the equalization department, which is itself a check on local assessment, with a check on itself existing in the state equalization department.
"The reason we have these separated is conflict of interest," he said. "Does equalization get moved up from the county to the state next?"
Equalization is the process by which the county regulates the cost of properties on a class-by-class basis, assigning a rating to residential, commercial and other property classes that increase or decrease the locally assessed value. The state subsequently sets a value for each class or zone of property that increases or decreases the county equalization rating to keep values uniform and in check.
In addition to the broad question of conflict, Scorsone said that just about every county he has communicated with reported that it didn't have the staff or building capacity to take on such a burden in totality.
"In some cases, it makes sense, but in others it doesn't. But to force every one of those that doesn't make sense is a problem, and the majority of them don't," he said.
Scorsone also wondered what would happen to the local Board of Review, at which residents can dispute their valuation and go to court as a next step if the review is not agreeable.
Aside from the efficiency question, he also said that inefficiencies are sometimes built into government for a purpose.
"Many equalization directors expressed that we separate these things for a reason - that reason being that if you put all of these things in the same place, it's easier for corruption and other issues to arise," Scorsone said. "It's kind of like why we separate different cash management duties in municipalities, with some of those duties handled by different people, so it's more difficult to embezzle.
State law does allow local municipalities to farm out their property assessment to the county, which there are instances of in Washtenaw County.
Saline Township, for example, already contracts with the county to handle property assessment and Freedom Township typically has a partial contract with the county.
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