From the rehabilitation of the city’s downtown storefronts in the 1990s to last year’s renovation of Commercial Street, officials with the City of Dowagiac have invested in their community whenever necessary.

Stopping by the scenic confines of Cassopolis’ Edward Lowe Foundation late last week, Michigan Municipal League representative John LaMacchia told the crowded meeting room inside the property’s Tower of Tomorrow that the creation of new streetscapes such as Dowagiac’s are a vital way for local municipalities to attract new residents and businesses.

“All these things add life, a sense of place, to the community,” LaMacchia said. “People have a certain sense of ownership to your community has a result, a positive impact on how people feel and react, how they view their community.

“But far too often, the system does not allow us to do these types of things.”

The system, in this case, is the ways that cities, counties and townships are funded — methods that LaMacchia and other members of the MML say are crippling small governments.

LaMacchia visited Cassopolis Friday to share the organization’s findings on the problems facing municipalities’ finances and some possible ways local leaders can get around them, in a talk entitled “Michigan’s Broken Municipal Finance System: Issues And Proposed Actions.” The MML representative and lobbyist was invited to speak during a retreat for the Cass County Commissioners by Administrator Karen Folks.

Around 30 elected officials and administrators, including county commissioners, Dowagiac City Manager Kevin Anderson and several township supervisors, were in attendance, joined by other government employees and several residents.

One of the main issues Michigan’s local municipalities are suffering from is a lack of revenue sharing from Lansing, LaMacchia said. From 2002 to 2012, Michigan was the only state in the country where revenues for local municipalities fell, declining 10 percent over the decade, according to data compiled by the MML.

The lack of state funding is compounded by stagnation of revenues from property taxes, due in part to restrictions from several longstanding Michigan laws. According to LaMacchia, the average municipal property tax revenue is nearly on par with revenues from 2005.

“Has anyone’s asphalt costs gone up since then?” LaMacchia asked the leaders in attendance. “Have your service needs decreased? Has the cost of providing healthcare needs to employees gone down at all? All those things have been increasing in cost, while our abilities to pay for them with revenues coming into our communities have gone down. Yet the expectations of residents are still for us to provide them with police and fire, clean drinking water, parks, lighting for streets, [and] safety for residents. We have struggled to do that.”

Dowagiac, in particular, has felt this crunch on its pocketbook for more than a decade.

Speaking during Friday’s presentation, the Dowagiac city manager said the city has experienced its own stagnation in property tax dollars, due mainly to the fact the community is completely built out and opportunities for annexation are basically nonexistent.

As a result of declining revenue, city employment has gone from 81 employees around 13 years ago to 51 on the payroll now, Anderson said.

“We have tried our best to cut our way out of our financial issues, but at some point [the state] still has to provide services to local communities,” Anderson said.

To fight these funding problems, the MML has developed several potential solutions:

• Working with the state to reduce the cost burden of local municipalities for employee benefits such as healthcare.

• Increased sharing of service needs, such as water treatment, transportation and emergency services, between municipalities

• Enacting reforms that allow municipalities to generate revenues outside of stagnating property taxes.

“We have had meeting after meeting after meeting with [state] administrators and legislators, trying to get the message across to them,” LaMacchia said. “They need to understand that the dynamic needs to change, that we need to do things differently. And I can tell you very honestly that we have had a lot of success so far.”

LaMacchia also suggested that communities should continue to invest in themselves — as Dowagiac has done — to drive more people and businesses to decide to make them their home.

“Things like the streetscape you guys did change the dynamic of the community, makes it a little bit different,” LaMacchia said. “We have to change the environment, to make it where people don’t want to drive through your community but want to stop in your community. The more people you can get to stop, the better chance they will think about being there and relocating there in the long run.”