MML Review Magazine Fall 2026
Municipal Finance
By Anthony Minghine
Adopting the Budget Adopting a budget for your general fund and special revenue funds is required to be done every year by Public Act 2 of 1968, the Uniform Budgeting and Accounting Act, and there are a few things to be cognizant of when doing so. First, you may not adopt a budget that is in deficit; a budget is deemed to be in deficit if the annual expenditures exceed the revenues for that year, plus the projected ending fund balance. Second, the budget creates the legal financial authority to operate. Without a properly adopted budget, the operations of the municipality shut down. Setting Tax Rates During this same time, the council will be asked to set tax rates. The two biggest influences on this process are Headlee and Proposal A, which were passed as separate constitutional amendments. They both enact tax limitations but do so in different and conflicted ways. Headlee requires local governments to “roll back” a community’s maximum millage rates if tax growth exceeds inflation. It does not impact the levy unless a community is at its max (see chart), and many communities are, so be aware. Prop A limits tax revenues by limiting the value of growth on individual parcels to inflation or five percent, whichever is less. Ironically, the combination
You have been elected to serve in your community. Congratulations! Now you find yourself on the governing body, or maybe the chief elected official, of a multifaceted, multimillion-dollar organization. Even if you are accustomed to corporate accounting for business, the same rules do not apply for governmental accounting and budgeting. Trying to sort this all out in a magazine article can be difficult, but we will try to give you a foundation to build on. Your best resources are the management, finance, and audit professionals in your local government. They will have a deep understanding of your particular circumstance. What follows won’t make you a municipal finance expert, but it will give you insight into the types of issues you will be faced with in your role. Success Is Different Than in a Business First, understand the business of the city or village. A municipality is a nonprofit service-based industry, and profit-based manufacturing techniques rarely apply. Success or failure of a program isn't measured in income or return on investment but more likely on service levels or residents served. Running government like a business may be a great catch phrase, but it can be a formula for disaster if you misapply that mindset. Looking for efficiencies like a business is appropriate; using income as a service evaluator typically is not.
nw ox yp qz ¾¾{o|n}z¾r¾os uv x| ¾} ¾ wxy z¾{|}z¾}z z}zz}¾ ¾
»v¼opv½ w ² ¯° x ¤© ¾y°¡¾°±¾z¾©¾¾¾{¡¾£¡|°¾¾¾}¾©¾z¾µ¡¯©¾¾°§ ¡¾¾¤ µ¾£¯°¾§¾° ¾©¾± ¾¾ ¾¡°¾ ¯©¾£° ¾¾¾¾ £¾°°¤¾¾¾°§¾°± ¾¡ ¡¾¡¾©¤£±¾°¾© ¾¾¢±¾¾¤ °££¾¹¾·¾¤ ¾¾ ¾ ¾¡¾¤°¤¾°±©¾¾¾ °¡¤¾¾ ¾©¯¤° ¾ ¾µ ¾¾£ ¾ µ¾£¢¾°¾¾ ± §°¾¾¯°¾§¤ £¾¾¾¯°¾©°°±°¾¾¾© ¡ ¾¡©©¡¾¾©¾¾¤¾£¾¾¹¾ ¯°°©x¡±¾¡¾¡¤°|¤°¾¾±©°°¾±¢¡°¾¾¾£¾}¾¾¾ ¤ ¾¾¯¾°°¾©¡±µ ¡¾¾°°¤¡¾§¾°¾° ¤¾¾© ¡¯¾ ¾±¡°°¾ ¯¾©¾ ¾¢¢¾¤ ¡¾¾¡ ¤¾© ¯©¾¡¡¾ ¾¾¾°· ¾°¡¡©¾¾°£¾¾¾© ¾°¶ ¾¯ ¾¤ °·¡¾¯¾¾©· µ¾¾¾¤²§¾°£¾ ¬ ¾¹£ ¾¾©¾¾ ¯°¡ © ±¾¾±¾ ¯©¾¡µ¾¾£°¤£¾¾¾©±±¾¾¾°°¡§ ¾ °¡¾±°¾¾¾°°¯¾ ¤¾ ¾¾° ¾
°¦¡¡±¡¾²¾¾´ § o ¾ ¾ ¡ ¶ ª§¾«¾¾¾¾ ¾ ·¦ ¸¡¹´¾§¾¬©¡¾ ¾ °¡±¾¾²¡¾´§¾¾¾§¯®§¯¾µ°°¾¡¶£¾¾¾§ ¾ ºº¾¾º¾ ¾¾¾¾¾¾¡§·¸·²¹¹´´¡¹¸¾¾¢§§¾¾§£¾¾¾±¾°±°¾¯©¾¾¾°°¾± ¾ ¤ ¾ q ¾ ¾§ ¯ ¯ ¾ v ®¬ § © ° ¡ ¾ v µ ° £
q ¾ r ¾ ¾¾ ¥¦¨ §¡¢ £¾£¾© ¤ ¾
w ±°¾x z z ¾¾ ¾ y ¡ § z z © z ¯ ¾ ¾ } ¯¾
{ } } ¾ ¾ |¾ © ¾° } ¡ z ± ¾¾²¹¾ ¾ ¾ ¾ ¾ ¾ ¾ £¾ ¾
° ° } } } } ±¾z ¾ ¤° ¾ z z ¡ ° ¾ ¾ ° ¾ ¾ © ± ¾ ¡¤¾ ¾ ¾ ¾
¾ ¾ ± ¾°° ¾ ¯° ¾ ¾ ¡ ¢¾
° ¾ ¾ ±¢¾ ¾
¾ ¾ ¬ ¾ ¾ ¾¶ ¾¾! ° ¾ £ ¾ " °¤ ¤ # ¾
¾¤©¾°µ£¾°©¢¾ ¾¾ ¾°¾¾£¾¾
| Fall 2026 zz}¾ ¾}z¾ ¾ ¾ ¾ ¾ ¾ % &'()*+,-¾*/0¾12'-0* t?;83@ =>¾>43?8F>>64>3¾HM5;8C36¾¾>=67748CJ3>¾5:7¾@C866>¾¾4?;:¾G;4¾¾C<<=¾@¾<6>¾=76@=4¾3J>738¾:3;<:¾>6¾>3><¾6A¾>6A¾E>?¾?¾464B7;J;E:@@H7;I¾86¾A6¾5¾77¾46K?B7=C;4¾=6¾8C¾J7@<8¾6¾6>:>¾¾J43¾>¾;>3>?88¾¾4?H5>878E@@J=47;>6>;BL¾Q¾¾>>8B?N¾=>EF¾73M6>P8>45@353A7>¾8B;¾¾8A>A:8¾3>8¾53C7;3=64¾=@C76I8L5¾¾@I; ¾:>>;87¾CE¾@?<3¾=7C>;=¾686PBI3¾J¾E3@A:>>>¾4<>>@F=>;6>3¾¾B¾87¾;M;C68=@J¾;>E>>A¾>¾¾¾L¾ N44 >5?¾E>64J@;>86¾3>MIL¾¾6=RJ8>776E¾
776;M8CJ8?7;=3BB ;6;>¾6¾>;:>7I¾4¾ME>PC8=J7¾>C@;@>6;8@>¾E637A¾8>Z6¾76¾8C¾44A;I:¾¾4P==C¾¾>=6;8:¾6¾@63@<¾J4>E7=8>H4@3:¾CMM6:6¾JH;>M;L8¾6;6[I=>3¾64M>@8¾6¾7@<7;J;6¾B>A;Z>C 6¾8¾7¾?84;43>:83¾@@C¾3¾¾¾BC6>=;7;J6H8@7F7:438>>>8>:M@¾;¾@C5@7CB¾E¾=;B677>;Z6@6>EA8>: LJC3¾;4;I;B¾¾@¾36>C:@J46>>LE7¾5CCGL¾I¾6=¾7^M7C?87>¾@;:5>6¾¾4MJ78@4>6:M;8¾86>C6¾¾¾ @H7E5M=4=76BF56>J¾>;¾A¾E8E<476;46=>A86¾3¾;J64C¾?¾<@4LC¾¾A6~=J¾;BB444¾64>M6E¾?¾;=B¾>;6B8¾¾JH4@3>=¾@>;¾B3B>@8;7C¾8H3F6;;7¾IBA8¾83;4E3>:=>7C>8@¾5@I¾:¾E>7A6¾JG64>J;==¾@>67¾@JH6C>>>>7M@B¾¾L
36 |
Made with FlippingBook - Share PDF online