For Immediate Release: May 20, 2009

Daddow: ‘The absolute dollar amount we received in property taxes in 2008, … we won’t see that same level of dollars collected until probably 2020 or 2022’ by state and local governments, even if economy picks up

‘Perfect storm’ requires governments to ‘do business differently,’ says Oakland County deputy exec

Contact: Robert Daddow
Adjunct Scholar, Mackinac Center for Public Policy
Deputy County Executive, Oakland County
248-858-1650

MIDLAND — In a 14-minute video interview posted today on the Mackinac Center’s Web site, Oakland County Deputy Executive and Mackinac Center Adjunct Scholar Robert Daddow argues that even if the real estate market and the economy strengthen, “The absolute dollar amount we received in property taxes in 2008 — the absolute dollar amount — we won’t see that same level of dollars collected until probably 2020 or 2022, for governments.” This means, he adds, that in Michigan, “Governments are about to go through at least a decade of where two-thirds of their principal revenue source — two-thirds of revenue sources for most governmental units is property taxes, setting schools aside for a moment — that isn’t going to go up.”

Daddow also observes that even before the Chrysler bankruptcy, Michigan governments were headed for “a perfect storm,” which is “basically a whole series of fiscal issues that are occurring all at the same time, all heading downward and all adversely affecting governmental units — counties, cities, villages, townships, school districts and the state.”

Daddow recommends that government officials focus seriously on long-term planning, getting control of labor contracts and attending to retiree health care costs. He also suggests governments consider cooperative provision of services and contracting services with private providers, adding: “People need to start thinking about how they’re going to do business differently than they have in the past. Maybe government ought not to be in some businesses. Government’s going to drop back to a core set of services sometime in the next several years. They’re going to have to do that.”

The interview, which is 14 minutes and 26 seconds long, is posted at www.mackinac.org/10549.