Many of Michigan’s local government officials—especially at the city and county level—believe a temporary or permanent loss of public funding will cause financial problems, though fewer are preparing for such cuts.

The findings come from the latest installment of the Michigan Public Policy Survey conducted by the University of Michigan’s Center for Local, State, and Urban Policy. They are particularly relevant as the clock runs down or out on major federal funding sources.

Overall, 40% of local government officials statewide say the loss or pause of one type of federal or state funding will pose problems. However, that jumps to 72% of city leaders and 68% of their counterparts in Michigan counties.

The study also finds that 60% of local governments currently aren’t preparing for a loss of funding. Cities and counties are more likely to say they are making preparations while villages and townships are less likely.

Still, even among jurisdictions who say the end or pause of one or more types of funding would be a somewhat or significant problem for their fiscal health, 44% are not preparing for loss of federal or state funding.

“Both uncertainty as well as other internal local governmental capacity challenges are hindering some local governments from girding themselves for the coming drop in revenues that will impact their budgets and their service provision,” said Debra Horner, the survey’s senior program manager.

Many local governments face the end of several short-term federal funding streams such as the 2021 American Rescue Plan Act, the 2022 Infrastructure Investments and Jobs Act and Inflation Reduction Act, as well as potential cuts to ongoing federal support for services such as housing and transportation.

Funding for the last two was paused by executive order by the Trump administration in January, leaving uncertain any future release of money. The first, the American Rescue Plan, brought huge infusions of money into communities, but local governments were required to commit the funds to specific purposes by December 2024 and spend them by the end of 2026.

Many Michigan governments reported being in “wait and see” mode, monitoring the situation or reviewing current spending and reliance on grants. Others reported restricting spending and accelerating projects before the money runs out and costs rise due to tariffs. Community leaders also say they are working to increase revenues through new fees and taxes or seeking grant funding from other sources.

The survey was conducted April 7-June 12. Respondents include county, city, township and village officials from 1,328 jurisdictions across the state, resulting in a 72% response rate by unit.