There are many factors that influence decisions regarding business investment and jobs in a region. One critical difference-maker is how a region stacks up when it comes to the cost and value of government. It is our local governments that provide valued services including public safety, infrastructure and recreation that influence the quality of life in which prospective employees want to live.

The tri-county region (Ingham, Eaton and Clinton) consists of 77 general purpose local governments including 12 cities, 14 villages and 48 townships. Collectively, the government functions delivered by those governments represent a $500 million enterprise.

The size and scope of local government and the impact that efficient delivery of quality services has on economic development has sparked interest among business leaders in Greater Lansing in recent years. One year ago, the Lansing Regional Chamber of Commerce (LRCC), Lansing Economic Area Partnership (LEAP) and several business leaders joined with Michigan State University president Lou Anna Simon to begin the process of determining how the region compares to others around the country when it comes to the cost, efficiency and quality of local government.

“The group quickly agreed that our first step was to gather comprehensive data that would allow us to quantify and benchmark the cost and value of government,” said LRCC president & CEO Tim Daman.

MSU agreed to underwrite the cost of an extensive research project that would provide the data business leaders said they needed. MSU Extension specialist, Dr. Eric Scorsone, noted for his studies of local government finances, led a team of researchers that compared government costs in the Lansing region to 22 other communities around the country. Scorsone presented his findings at the Lansing Economic Club’s fourth annual regionalism forum on May 10.

“This data is only a starting point of what the region should be doing relative to benchmarking over time,” Scorsone told the Economic Club audience of 400 people at the MSU Kellogg Center. “This should be considered a baseline.”

Scorsone noted that the research results were intended as a broad overview designed to show where the region should focus and what services are potential candidates for regionalism. For example, public safety is an area where the region is a high spender, which Scorsone said does not necessarily mean the region is inefficient. 

“Public safety is clearly an area that needs to be looked at,” said Scorsone.

A team from Plante Moran will “drill down deeper” into public safety costs in second study that looks at fire service spending in the cities of Lansing and East Lansing and four townships. Results and recommendations from the fire services study are expected later in June.

The Scorsone study also found that government costs in the Lansing region are quite high in the general government area (basic government operations), and somewhat low in the economically critical areas of transportation and infrastructure, which Scorsone said will require action at the state level.

“It is well known that Michigan’s gasoline tax is an inefficient way to fund infrastructure,” said Scorsone.

Scorsone was part of a panel discussion at the Economic Club luncheon, which also included Doug Rothwell of the Business Leaders for Michigan, and Carmen Hickerson of Greater Louisville, Inc. which is the lead economic development agency in Louisville, Kentucky.

Rothwell talked about the economic development advantages involved when government creates efficiencies by consolidating its services. He told the crowd that the challenges facing metro areas in Michigan have no easy answers. He also credited the Lansing region with being ahead of the curve in thinking about regionalism.

“There is no silver bullet that is going to fix our urban areas,” said Rothwell. “A holistic approach is needed to find real solutions.”

Hickerson shared experiences in Louisville, where voters approved a merger of the city and county government ten years ago. Multiple economic development efforts were also folded into a single organization, which is now Greater Louisville, Inc.

“The goal was to create one voice in economic development and government,” said Hickerson.

Hickerson credited the government merger with helping to save and eventually expand the manufacturing presence of Ford Motor Company in the region. Though there have been a few naysayers, Hickerson said most in the region now support the merger. She told the Economic Club crowd that the leadership of the business community is essential if such an undertaking is to be successful.

“The business community has to invest and be willing to stick with it even in the face of opposition,” said Hickerson. “If the will of the business community is strong enough, the political leaders will get on board.”

Hickerson also cautioned the crowd of the difference between an outright government merger and the concept of regionalism, which she said is a philosophy.

“We decided (in Louisville) that we are really more successful when we work together than against each other,” said Hickerson.

When prompted by an audience question, Rothwell offered this advice to the community.

“You need to look at your region as one region,” said Rothwell.

The MSU benchmarking study and a fire services study expected in the next few weeks are the first steps in trying to create a unified regional vision. The working group of business leaders plans to undertake a poll later in the summer to determine more about the community sentiments in regard to further potential regionalism efforts.