In this post, we examine the location of art, history, military, science, theater, and other types of cultural institutions in the area. So far, we have identified about 220 cultural institutions located in Southeast Michigan, the majority of which are either related to art, history, or theater. In addition to displaying their locations, we have also included an overlay of the mean household income for the Metro-Detroit area (Wayne, Macomb and Oakland counties). The income related overlay is to display what correlation, if any, there is to the location of cultural institutions and income.

For the “Art Assets” map the art museums, for profit and non-profit, are displayed on the map, as are art galleries in the region. The “Historical Museums and Institutions” shows where community historical museums are located, in addition to larger scale museums like Charles H. Wright Museum of African American History. “The Private and Non-Profit Theaters” map also shows where community based institutions are along with larger theaters, like the Fox Theater and the Detroit Opera House. The “Science Museum” map mainly displays scientific based museums funded through universities, with a few exceptions, while the “Cultural Institutions” maps shows where assets such as auto museums and the Cranbrook gardens are located.

Based on our findings to date, theaters and historical organizations are the most widely distributed in the seven-county region and make up the majority of the cultural institutions in the area. Altogether, we have identified 64 theaters and 80 historical organizations in the region, which accounts for 65 percent of the overall number.

For these types of cultural institutions, it is not uncommon for local communities to house non-profit, and sometimes private, entities that display their historical and theatrical attributes. With these organizations being so widespread, it is difficult to link their locations to income distribution.

Many arts organizations, however, are located in areas where the mean income is above $60,001. The Danielle Peleg and Art Leaders galleries in West Bloomfield and the Paint Creek Art Center and Oakland University art galleries in Rochester Hills are such examples. While the mean income of census tracts in Detroit is typically between $20,001 and $40,000, there are still several art museums and cultural institutions located in the city, particularly in Midtown and downtown.

Military and science organizations were the least prevalent in the seven-county region.

Also, if interested in learning more about income distribution click here.

Livingston, Oakland, Washtenaw counties have the highest median household income in the Southeast Michigan region. In this post, we examine the median household income by census tract for the City of Detroit, and Wayne, Macomb, and Oakland counties. In addition, the median household incomes for all the communities in Southeast Michigan are presented.  These numbers were based on information obtained from both the American Community Survey and city-data.com, a website which aggregates community data.

The three maps above show the median household income by census tract for 2011 for the City of Detroit, Wayne County and the tri-county region. The data was provided by the American Community Survey. As can be seen, Detroit and many other inner-ring suburbs had multiple tracts with household median incomes below $60,001.

While the census tracts with lower median household incomes were mainly centralized around Detroit, there were also tracts in southern Macomb County and central and southeast Oakland County whose median household incomes were between $20,000 and $60,001.

With the exception of the Grosse Pointes and a few other tracts in and around the city, many of the communities/tracts that had median household income values over $60,000 did not border the City of Detroit.

The maps above show information from 2009 aggregated by city-data.com; this is a website that collects information form various sources to provide profiles on U.S. cities. According to the data, in 2009, Redford and Garden City both had median household incomes of $16,751, the lowest in Wayne County. Hazel Park had a median family income of $21,469 and Hamtramck had a median family income of $30,346; Detroit’s was reported at $33,754.

Oakland County only had three communities with median household incomes below $35,000; they were Royal Oak, Commerce, and Lyon townships. In contrast, there were 10 communities with a median family income over $100,000. Bingham Farms, at $148,295, had the highest median household income in the county.

Like Oakland County, a majority of the communities in Livingston and Washtenaw counties had median household incomes above $60,000. Barton Hills in Washtenaw County had the highest median household income in the region at $197,830. Handy Township in Livingston County, at $8,237, had the lowest median household income.

A majority of the communities in Wayne, Macomb, Monroe, and St. Clair counties had median household incomes of $60,000 or below.

Next week we will look at the locations of various cultural institutions in Southeast Michigan in comparison to the mean household income of the communities they are located in.

In Michigan, cities, townships, villages, and other municipalities cannot levy their own sales taxes.  Only the state government collects and levies sales taxes.  In fact Detroit asked permission to levy a 1% sales tax as it descended into bankruptcy—the State Legislature said, “no.” The rationale for this centralized system of sales tax is that having lots of different sales tax rates is confusing to consumers, imposes a burden on businesses, and can lead to unhealthy competition among municipalities. There are other states that permit municipalities to create their own sales taxes (e.g., Missouri), and this leads to situations in which the same product is taxed at a different level depending on whether it is purchased in City “A” or an adjoining Township “B” a few blocks away.

The argument  that has prevailed in Michigan is that it makes sense for the State to establish one sales tax rate, collect the tax revenue, and then “share” it with municipalities and other units of government in the state. But this system relies on the premise that the State of Michigan will be an honest broker and share the revenue equitably, responsibly, and reliably. This assumption has been challenged in recent years.

There are two categories of revenue sharing in Michigan—constitutionally mandated and statutory revenue sharing. The latter is based on laws that the legislature can alter; the former is more securely enshrined in the state constitution. But even constitutional revenue sharing can decrease when overall revenue declines, as it tends to during recessions, or when the population of a municipality declines. As we see below, in recent years the State of Michigan has stopped sharing as much revenue as it had historically. Some observers argue that in recent years the State of Michigan balanced its budget on the backs of municipalities throughout the state by taking the lion’s share of the revenue raised from the sales taxes. Additionally, components of the revenue sharing formula change as different political parties seek to provide more revenue to districts represented by legislators from that political party as they try to protect the interests of their constituents.

In the past decade the Southeastern Michigan has been on the losing end of the “revenue sharing” arrangements. Since 2003 the region has experienced a 47.8 percent decrease in combined revenue sharing- constitutional and non-constitutional-, according to the Michigan Senate Fiscal Agency.

There are 231 municipalities that make up the seven-county Southeast Michigan region (Wayne, Oakland, Macomb, St. Clair, Monroe, Livingston and Washtenaw), and of those only 13 did not experience a loss in revenue sharing. These communities are: Macomb Township, Washington Township, New Baltimore, Berlin Township, Holy Township, Augusta Township, Lima Township, Saline Township, the Village of Dexter, Conway Township, Hartland Township, Oceola Township, and Marion Township.  In contrast, 147 of the 231 municipalities in the region experienced a decrease in revenue sharing of 25 percent or more between fiscal years 2003 and 2012. Highland Park experienced the largest decrease in revenue sharing, at 57.17 percent. The City of Detroit was close behind, losing 56.76 percent of its total revenue sharing funding from the state between 2003 and 2012.

Since the 1930s municipalities in the State of Michigan have received revenue sharing payments from the state government (See attached “A Little Bit of History” at the end of this post.). The distribution of these funds has changed, however, over the years, most recently during the 2011-12 fiscal year and especially for non-constitutional funding, formerly called “statutory revenue sharing.”  In 2007, a formula was created that included an annual budget bill boilerplate, according to Michigan in Brief. “Statutory revenue sharing” was renamed the Economic Vitality Incentive Program (EVIP) in the 2011-12 fiscal year. In order to earn EVIP funds, municipalities must meet requirements set forth by the state related to transparency, coordination of services, and employment compensation, according to the Michigan Senate Fiscal Agency.

While the EVIP funding now depends on a community’s willingness, and ability, to comply with those requirements, there are no such stipulations for the constitutional funding provided to such communities. Michigan’s sales tax rate is 6% and of, that two percent goes to the school aid fund. Fifteen percent of the remaining 4 percent in sales tax revenue is “shared” with the municipalities on a per capita basis. The U.S. Census population figure used by the state is adjusted so that 50% of the institutional population (e.g., prisoners) is removed from the population count, according to the Michigan Senate Fiscal Agency. After the release of Census data, each municipality’s constitutional revenue sharing percentage is adjusted based on its new population figure. For example, following the release of 2010 Census data, Macomb Township, which had an increase in population, also experienced an increase in revenue sharing funding. The City of Detroit which experienced population loss, then also had a decrease in revenue sharing.

The percent change numbers shown in these posts present both the 2003 and 2012 data adjusted to the 2012 Consumer Price Index (CPI).

The “actual” revenue sharing numbers for 2003-2011 are adjusted for inflation using the 2012 chained Consumer Price Index (CPI) published by the U.S. Department of Labor–the most recent year for which an annual CPI is available.  Each year’s revenue sharing allotment is therefore raised to 2012 dollars using standard CPI adjustment formulas such as those used by the Health Economics Resource Center.  This approach, verified using the Department of Labor’s inflation calculator, treats all values as 2012 dollars and reveals a more complete picture of revenue sharing changes over time.

Over the next two weeks, Drawing Detroit is displaying maps showing the following:

• the percent change in total revenue sharing for each municipality in Southeast Michigan between 2003-2012;
• the percent change in statutory funding;
• the percent change in total funding;
• the per capita revenue expenditures for each municipality; and

the amount of total revenue sharing funds provided to each community in 2012.

The above two charts show the total amount of revenue sharing funds distributed to the Southeast Michigan region from 2003 to 2012. The first chart shows the inflation adjusted amount of funds distributed each year and the second chart shows the amount of real dollars distributed. Both charts show that while constitutional revenue sharing has remained fairly steady since 2003 there has been a decrease in the amount of statutory, or non-constitutional, revenue sharing funds distributed.

The above map demonstrates the percent change in constitutional revenue sharing funds from 2003-12 (CPI adjusted). Detroit lost 35.2 percent of its constitutional funding in that time; Royal Oak Township lost 61.5 and Ira Township lost 36 percent. While the map shows that majority of the municipalities that make up Southeast Michigan experienced a decrease in constitutional revenue sharing funds; there were 38 municipalities with a percent increase in constitutional funding. Dexter Township experienced the highest percent increase at 50.2 percent; New Baltimore came in next at 41 percent.

None of the municipalities that make up Southeast Michigan experienced a percent increase in statutory, now known as Economic Vitality Incentive Program, funding from 2003-2012. As noted earlier, there were changes in the way statutory funds were earmarked and distributed in 2007 and 2011. There were 121 municipalities that did not receive in EVIP funding in 2012. A community is not provided their portion of EVIP funding if they do meet requirements related to transparency, coordination of services, and employment compensation set forth by the state.

Highland Park lost 57.17 percent of its total revenue sharing (CPI adjusted) from 2003 to 2012 and the City of Detroit is a close second losing 56.8. In total, the entire region experienced a loss of 47.7 percent of revenue sharing. According to information provided by the Michigan Senate Fiscal Agency, only 11 municipalities experienced a percent increase during that time period.

The above map shows per capita revenue expenditures for Southeastern Michigan in 2012. Detroit’s per capita revenue spending was $245.9, which was the  second highest in the region. Harrison Township had the highest per capita revenue expenditures in the region at $315.8. The Village of Dexter had the lowest at $49.1 per capita. Data for Livingston County were not available because of the federal government shutdown.

In next week’s post, we will take a more in-depth look at the loss of revenue sharing in Detroit from 1998 to 2012. Also, a map for each county will show the actual amount of total revenue sharing each municipality received in 2012.

A Little Bit of History:

In 1933 the State of Michigan began collecting funds by taxing establishments that served liquor. Of those funds collected, 85 percent of it was returned the municipalities in the state, according to the Michigan Municipal League (MML). Six years later, in 1939, the state shared portions of the new state intangibles tax—formerly a source of local funding—with cities, villages, and townships; the portion that was removed was the intangible property tax. Then, in 1946, portions of Michigan’s sales tax were earmarked for local government funding. Such funding operations continued until 1963, when a change in the state constitution guaranteed one-eighth of the funds garnered from sales taxes would be devoted to local governments, according to the MML.

In 1972, Public Act 212 tied the relative tax efforts (RTEs) of cities, villages, and townships to the portion of state income tax revenues they received, according to Michigan in Brief. The RTE compares a municipality’s property, income, and excise taxes to that average of all municipalities within the state. This change in statutory funding was to put more focus on a municipality’s needs-beyond population-because different municipalities may need different public services but have different revenue-raising abilities beyond those based on population, according to Michigan in Brief.  Then, in 1974 the amount of tax revenue earmarked for constitutional revenue sharing increased from one-eighth to one-fifth of the funds brought in each year. This was after citizens in the state voted to have food and drugs exempted from the sales tax. A year later, other changes occurred, again focused toward statutory revenue sharing because whatever the full amount of constitutional revenue sharing calculated by the Michigan Legislature each year must be distributed. Not only was the Small Business Tax enacted, where portions of it were received  each year by local governments and included in RTE, but also counties were only given 35 percent of income tax distribution, as opposed to 50 percent previously given to them, and municipalities were given 65 percent.

Aside from some statutory revenue sharing payment reductions in the 1980s and 1990s because of state budget problems, the distribution of revenue sharing funds remained steady. Then, Public Act 342 of 1996 was enacted and the following changes occurred for statutory revenue sharing:

• The amount of funding each community received under the RTE funding was capped at the 1996-97 fiscal year level. If there was a growth in a revenue source it was to be distributed on a per capita basis;
• A bi-partisan task force was created and was charged with recommending various sources and distribution methods for revenue sharing in the future. If the task force stalled before funds were to be distributed, municipalities would receive the same funding from the year before and, if they were to receive additional monies, it would be put into a reserve fund until actions were taken.
• Sales and small business taxes were removed as sources of revenue sharing funds; additional sales tax revenue replaced this.

(According to Michigan in Brief)

Then, in 1998, Public Act 532 was enacted so a new formula could be phased in over a 10 year period. Part of this formula called for 23.1 percent of sales tax revenue to be distributed to municipalities. However, because of budget deficits and funding shortfalls, the 1998 formula has yet to be fully implemented for statutory funding, according the MML. According to the Michigan Department of Treasury though, 21.3% of the 4% gross collections of the state sales is currently distributed to Michigan municipalities for statutory funding.

• Detroit’s unemployment rate experienced a decrease in the month of August, dropping to 17.7 percent; (monthly)
• The overall number of people who work within the Detroit Metropolitan borders (both residents and non-residents of the City of Detroit) continued to increase throughout August; (monthly)
• There was also an increase in employment for the auto and auto part manufacturing industries in the Detroit Metropolitan Statistical Area during the month of August; (monthly)
• The Purchasing Manager’s Index for Southeast Michigan increased from July 2013 to August 2013; (monthly)
• The Commodity Price Index experienced a slight increase from July 2013 to August 2013 for Southeast Michigan; (monthly)
• Standard and Poor’s Case-Shiller Index show that the prices of homes in the Detroit area continue to increase each month; (monthly)
• The number of building permits obtained in Wayne and Oakland Counties increased from July 2013 to August 2013; (monthly).

According to the most recent data provided by the Michigan Department of Technology, Management and Budget, there was a 0.7 percent decrease in the unemployment rate for the State of Michigan, falling from 9.7 percent in July 2013  to 9 percent in August 2013. For the City of Detroit, the unemployment rate also decreased, from 18.9 percent percent in July 2013 to 17.7 percent in August 2013.

In August 2013, there were 288,224 people (both residents and non-residents) employed in the City of Detroit.  This was an increase of 3,085 people from the number of people (both residents and non-residents) employed in the City of Detroit in July 2013.

The above chart shows the number of people employed in the auto and auto part manufacturing industries in the Detroit Metropolitan Statistical Area (MSA) increased from August 2012 to August 2013. The number of auto manufacturing employees in the area increased by 5,400 from July 2013 to August 2013.

The Purchasing Manger’s Index (PMI) is a composite index derived from five indicators of economic activity: new orders, production, employment, supplier deliveries, and inventories. A PMI above 50 means the economy is expanding.

According to the most recent data released on Southeast Michigan’s Purchasing Manager’s Index, there was an increase of 7.1 points from July 2013 to August 2013. In August 2013, a PMI of 60.2 was recorded which is reflective of an increase in production activity and new orders.