Overview
Michigan counties and municipalities (or local governments [LGs]) have maintained stable credit quality during the past year as the result of stable and growing revenues, pandemic-related federal stimulus funds, and conservative budgeting practices. Some macro and local credit factors such as the winding down of federal stimulus funds, rising costs, and deferred capital projects, could present budgetary challenges in the next few years. S&P Global Ratings believes that LGs might increasingly turn to voters for a special-operating levy or a Headlee Override to offset rising costs. However, current reserve and liquidity positions, which for many LGs are at an all-time high, provide sufficient cushion and time to respond to these challenges.
We maintain ratings on 245 municipalities and 53 counties in Michigan. Eight ratings, consisting of seven municipalities and one county, have negative outlooks, while the rating on one municipality has a positive outlook. Since Jan. 1, 2024, we have taken positive rating actions on seven municipalities, including Detroit (BBB/Stable general obligation rating), and three counties, largely due to improved financial performance or the implementation of management strategies, which enhanced the issuers' reserves and long-term liabilities profiles. We have taken negative rating actions on six municipalities and two counties, largely fueled by deteriorating financial positions especially in LGs with below-average economies and management practices. We took negative rating actions on four municipalities due to the application of our new criteria, "Methodology For Rating U.S. Governments," published Sept. 9, 2024.
Credit Fundamentals
Potential Challenges
- Predictable revenue streams, with property taxes making up the majority of operating revenue. However, statutory limitations on property tax levies reduce financial flexibility for many LGs.
- Very strong reserves, with median available reserves compared with revenues of approximately 54% for municipalities and 66% for counties, which are higher than national medians.
- Improving pension funded ratios for many LGs, although retirement costs, especially for those with weak assumptions, will remain a considerable budget pressure.
- Slow-to-stagnant population growth due to declining net migration and an aging population. While population increased in each of the past three years, the rate of increase is lower than the nation and we expect declines over the long term.
- Above-average reliance on manufacturing, particularly within the automotive space. While this has supported job growth in recent years, it could limit the state's long-term growth potential due to its historically cyclical nature.
- Significant infrastructure needs, with aging roads and utility systems, which can pressure budgets through increased costs and debt or through weaker economic growth prospects if left unaddressed.
What We Are Watching In 2025 And Beyond
Chart 1
Chart 2
Table 1
Michigan municipalities: Medians | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
AAA | AA+ | AA | AA- | A+ | A | A- | BBB+ and below* | |||||||||||
Median county GCP (%) of the U.S. | 135.15 | 99.10 | 87.30 | 72.00 | 68.85 | 49.40 | 62.30 | 79.65 | ||||||||||
Median county PCPI (%) of the U.S. | 129.65 | 102.30 | 93.70 | 77.50 | 74.20 | 79.90 | 71.80 | 75.00 | ||||||||||
Median local HHEBI (%) of the U.S. | 158.20 | 129.35 | 99.20 | 91.70 | 79.15 | 76.85 | 72.25 | 75.35 | ||||||||||
Median local PCEBI (%) of the U.S. | 164.30 | 126.50 | 103.20 | 91.40 | 74.70 | 81.40 | 70.75 | 75.85 | ||||||||||
Median three-year performance average (%) of revenues | 1.10 | 6.50 | 6.15 | 6.30 | 3.75 | 2.30 | 7.00 | 8.50 | ||||||||||
Median general fund balance (%) of revenues | 50.75 | 66.30 | 58.00 | 58.65 | 37.05 | 52.20 | 47.80 | -0.60 | ||||||||||
Median fund balance plus non-general fund (%) of revenues | 49.75 | 60.50 | 58.60 | 56.75 | 41.30 | 47.00 | 47.80 | -0.60 | ||||||||||
Median debt service (%) of revenues | 4.10 | 4.10 | 3.85 | 4.50 | 4.00 | 6.10 | 12.75 | 13.60 | ||||||||||
Median net direct debt per capita | 850 | 492 | 626 | 749 | 734 | 1,172 | 621 | 2,787 | ||||||||||
Median pension contribution (%) of revenues | 8.00 | 5.05 | 7.25 | 8.65 | 12.20 | 5.20 | 17.55 | 5.95 | ||||||||||
Median net pension liablity per capita | 568 | 179 | 245 | 403 | 1,117 | 571 | 53 | 494 | ||||||||||
*While we are providing medians for BBB+ and lower ratings, such ratings have additional qualitative factors that are supporting them. GCP--Gross county product. PCPI--Percapita personal income. HHEBI--Household effective buying income. PCEBI--Per capita effective buying income. |
Table 2
Michigan counties: Medians | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
AAA | AA+ | AA | AA- | A+ | ||||||||
Median County GCP (%) of the U.S. | 112.20 | 72.70 | 56.00 | 54.40 | 49.90 | |||||||
Median County PCPI (%) of the U.S. | 109.60 | 91.10 | 78.80 | 69.20 | 68.95 | |||||||
Median local HHEBI (%) of the U.S. | 112.00 | 99.70 | 89.85 | 80.30 | 78.60 | |||||||
Median local PCEBI (%) of the U.S. | 120.60 | 102.40 | 87.25 | 77.00 | 77.10 | |||||||
Median three-year performance average (%) of revenues | 4.80 | 6.60 | 2.25 | 6.20 | 0.00 | |||||||
Median general fund balance (%) of revenues | 43.20 | 52.80 | 29.95 | 41.30 | 9.80 | |||||||
Median fund balance plus non-general fund (%) of revenues | 44.50 | 94.80 | 64.40 | 65.10 | 52.10 | |||||||
Median debt service (%) of revenues | 1.50 | 3.30 | 3.30 | 4.40 | 3.60 | |||||||
Median net direct debt per capita | 338,253 | 75,066 | 28,274 | 15,801 | 32,051 | |||||||
Median pension contribution (%) of revenues | 3.10 | 5.80 | 6.20 | 5.40 | 5.85 | |||||||
Median net pension liablity per capita | 195 | 30 | 367 | 347 | 262 | |||||||
GCP--Gross county product. PCPI--Percapita personal income. HHEBI--Household effective buying income. PCEBI--Per capita effective buying income. |
Table 3
Michigan municipalities: Rating list | ||
---|---|---|
This list was prepared by individuals on behalf of the U.S. public finance group of S&P Global Ratings and is current as of Feb. 12, 2025. For the most up to date, accurate, and complete information on any credit ratings referenced in the list, please visit www.standardandpoors.com | ||
Entity | Rating | Outlook |
Ada Township | AA+ | Stable |
Adams Township | AA- | Stable |
Adrian | A+ | Stable |
Albion | A+ | Stable |
Allegan | AA- | Stable |
Allen Park City | A+ | Stable |
Alpena | AA- | Stable |
Alpena Township | AA- | Negative |
Alpine Township | AA | Stable |
Ann Arbor | AAA | Stable |
Auburn Hills | AA+ | Stable |
Augusta Charter Township | AA- | Stable |
Bath Charter Township | AA | Stable |
Battle Creek | AA- | Stable |
Bay City | A+ | Stable |
Bear Creek Township | AA | Stable |
Benton Charter Township | A+ | Stable |
Birch Run Township | AA- | Stable |
Birch Run Village | A | Stable |
Birmingham | AAA | Stable |
Blackman Charter Township | AA- | Stable |
Blissfield Village | A+ | Stable |
Bloomfield Hills | AAA | Stable |
Boyne City | AA- | Stable |
Bridgman | A+ | Stable |
Brighton | AA | Stable |
Brighton Charter Township | AA+ | Stable |
Brownstown Charter Township | AA- | Stable |
Bruce Township | AA+ | Stable |
Buchanan | A | Stable |
Cannon Township | AA+ | Stable |
Canton Charter Township | AA | Stable |
Cascade Charter Township | AAA | Stable |
Casco Township | AA- | Stable |
Charlevoix | AA- | Stable |
Charlotte | A+ | Stable |
Charter Township of Bloomfield | AAA | Stable |
Charter Township of Emmett | A+ | Stable |
Charter Township of Grand Haven | AA | Stable |
Charter Township of Texas | AA+ | Stable |
Chelsea | AA | Stable |
Chesaning Village | BBB+ | Stable |
Chesterfield Charter Township | AA | Stable |
City of Dexter | AA | Stable |
City of Jonesville | A+ | Stable |
City of Lansing | A+ | Stable |
City of Morenci | A+ | Stable |
City of St. Johns | AA- | Stable |
Clawson | AA- | Stable |
Clay Township | AA | Stable |
Clinton Charter Township | AA+ | Stable |
Coldwater | AA- | Stable |
Columbia Charter Township | A+ | Stable |
Commerce Charter Township | AA+ | Stable |
Coopersville | AA- | Stable |
Dearborn Heights | A+ | Stable |
Delhi Charter Township | AA | Stable |
Delta Charter Township | AA+ | Stable |
Detroit | BBB | Stable |
DeWitt | AA+ | Stable |
Dewitt Charter Township | AA | Stable |
Dowagiac | A | Stable |
Durand | A+ | Stable |
East China Chart Township | A | Stable |
East Grand Rapids | AA+ | Stable |
East Lansing | AA+ | Stable |
East Tawas | AA- | Stable |
Eaton Rapids | A+ | Stable |
Ecorse | BB- | Stable |
Elk Township | A | Stable |
Elba Township | AA | Stable |
Elberta | BBB | Stable |
Elk Rapids Village | AA- | Stable |
Elmwood Charter Township | AA | Stable |
Escanaba | AA- | Stable |
Farmington | AA | Stable |
Farmington Hills | AAA | Stable |
Fenton | AA- | Stable |
Ferndale City | AA | Stable |
Flat Rock | A+ | Stable |
Fowlerville Village | A+ | Stable |
Frankenmuth | AA | Stable |
Franklin Village | AA | Negative |
Fremont | A | Stable |
Fruitport Charter Township (Muskegon County) | AA- | Stable |
Garden City | A+ | Stable |
Gaylord | AA- | Stable |
Genoa Charter Township | AA+ | Stable |
Gladstone | A- | Negative |
Glen Arbor Township | AA+ | Stable |
Grand Blanc | AA- | Stable |
Grand Blanc Charter Township | AA- | Stable |
Grand Haven | AA | Stable |
Grand Ledge | AA- | Stable |
Grand Rapids | AA | Stable |
Grattan Township | AA | Stable |
Green Lake Township | AA- | Stable |
Grosse Ile Township Wayne County | AA | Stable |
Grosse Pointe | AAA | Stable |
Grosse Pointe Farms | AAA | Stable |
Grosse Pointe Park | AA | Stable |
Grosse Pointe Woods | AA+ | Stable |
Hamburg Township | AA+ | Stable |
Hampton Township | AA- | Stable |
Hancock | A | Stable |
Hastings | AA- | Stable |
Hazel Park City | A+ | Stable |
Henrietta Township | AA- | Stable |
Highland Charter Township | AA | Stable |
Hillsdale | AA- | Stable |
Holland | AA | Stable |
Holly Village | A+ | Stable |
Houghton | AA- | Stable |
Howell | AA- | Negative |
Hudsonville | AA- | Stable |
Huntington Woods | AA+ | Stable |
Imlay City | A+ | Stable |
Independence Charter Township | AA+ | Stable |
Inkster | BB | Stable |
Iron Mountain | A+ | Stable |
Ishpeming | A | Stable |
Jackson | A+ | Stable |
Kalamazoo | AA- | Stable |
Kalamazoo Charter Township | AA- | Stable |
Lake Charter Township | AA- | Stable |
Lake Orion Village | AA- | Stable |
Lansing Charter Township | BBB | Stable |
Lapeer | AA- | Stable |
Lathrup Village | AA- | Stable |
Leland Township | AA | Stable |
Lincoln Charter Township | AA | Stable |
Lincoln Park | BBB | Positive |
Linden | AA- | Stable |
Littlefield Township | A | Stable |
Livonia | AA | Stable |
Long Lake Township | AA | Stable |
Lowell | AA- | Stable |
Lyon Charter Township | AA+ | Stable |
Mackinac Island | AA- | Stable |
Macomb Township | AA+ | Stable |
Madison Charter Township | A+ | Stable |
Madison Heights | AA | Stable |
Manistee | A+ | Stable |
Marquette | AA | Stable |
Marshall | AA- | Stable |
Marysville | AA- | Stable |
Mason | AA- | Stable |
Menominee | A+ | Stable |
Meridian Chart Township | AA+ | Stable |
Midland | AA- | Stable |
Milford Charter Township | AA+ | Stable |
Milford Village | AA+ | Stable |
Monitor Charter Township | AA- | Stable |
Monroe | A+ | Stable |
Mount Clemens | AA- | Stable |
Mundy Charter Township | AA- | Stable |
Muskegon Charter Township | A+ | Stable |
Muskegon City | A+ | Stable |
Negaunee | A+ | Stable |
New Baltimore | AA- | Stable |
New Buffalo | AA+ | Stable |
New Buffalo Township | AA+ | Stable |
Northfield Township | AA- | Negative |
Northville Charter Township | AAA | Stable |
Norton Shores | AA- | Stable |
Norway | A- | Negative |
Novi | AAA | Stable |
Oak Park | A+ | Stable |
Orchard Lake Village | AA+ | Stable |
Orion Charter Township | AA | Stable |
Owosso | A+ | Stable |
Oxford Charter Township | AA+ | Stable |
Oxford Village | AA- | Stable |
Parma Village | A+ | Stable |
Paw Paw Township | A+ | Stable |
Peninsula Township | AA+ | Stable |
Pennfield Charter Township | AA- | Stable |
Pentwater Village | AA- | Stable |
Pere Marquette Charter Township | AA | Stable |
Petoskey | AA | Stable |
Plainfield Charter Township | AA | Stable |
Plainwell | A | Stable |
Pleasant Ridge | AA | Stable |
Plymouth | AA+ | Stable |
Plymouth Charter Township | AA+ | Stable |
Port Huron | A+ | Stable |
Portage | AA+ | Stable |
Portland | A+ | Stable |
Redford Charter Township | A+ | Stable |
Riverview | A+ | Stable |
Rochester | AAA | Stable |
Rochester Hills | AAA | Stable |
Rockwood | A+ | Stable |
Rogers City | A | Stable |
Romeo Village | AA- | Stable |
Romulus | AA- | Stable |
Roosevelt Park City | A+ | Stable |
Roseville | A+ | Stable |
Ross Township | AA | Stable |
Royal Oak | AA | Stable |
Saginaw Charter Township | AA | Stable |
Saint Clair Shores | AA- | Stable |
Saline | AA+ | Stable |
Saugatuck | AA | Stable |
Sault Ste Marie | A+ | Stable |
Scio Township | AA | Stable |
Shelby Charter Township | AA+ | Stable |
South Haven | AA | Stable |
South Lyon | AA+ | Stable |
Southfield | AA | Stable |
Southgate | A+ | Stable |
South Haven Charter Township | AA- | Stable |
Sparta Village | AA | Stable |
Spring Arbor Township | AA- | Stable |
Spring Lake Township | AA | Stable |
Springfield Charter Township | AAA | Stable |
St Ignace | A | Stable |
St Joseph | AA | Stable |
St. Joseph Charter Township | AA | Stable |
Sterling Heights | AA | Stable |
Sturgis | A+ | Stable |
Summit Township | A+ | Stable |
Sumpter Township | AA- | Stable |
Superior Charter Township | AA | Stable |
Swartz Creek | AA- | Stable |
Taylor | A+ | Stable |
Tecumseh | AA | Stable |
Township of Ray | AA- | Stable |
Troy | AAA | Stable |
Van Buren Charter Township | AA | Stable |
Vassar City | A | Stable |
Village of Cassopolis | A | Negative |
Village of Grosse Pointe Shores | AAA | Stable |
Walker | AA+ | Stable |
Warren | AA | Stable |
Washington Charter Township | AA+ | Stable |
Waterford Charter Township | AA | Stable |
Wayland | A+ | Stable |
West Bloomfield Charter Township | AAA | Stable |
Westland | A+ | Stable |
White Lake Charter Township | AA+ | Stable |
Woodhaven | AA | Stable |
Wyandotte | AA- | Stable |
Ypsilanti | A+ | Stable |
Ypsilanti Charter Township | AA- | Stable |
Table 4
Michigan counties: Rating list | ||
---|---|---|
This list was prepared by individuals on behalf of the U.S. public finance group of S&P Global Ratings and is current as of Feb. 12, 2025. For the most up to date, accurate, and complete information on any credit ratings referenced in the list, please visit www.standardandpoors.com | ||
Entity | Rating | Outlook |
Allegan County | AA | Stable |
Alpena County | AA- | Stable |
Antrim County | AA+ | Stable |
Arenac County | A+ | Stable |
Barry County | AA | Stable |
Bay County | AA- | Stable |
Berrien County | AA | Stable |
Branch County | AA- | Stable |
Calhoun County | AA | Stable |
Cass County | AA | Stable |
Cheboygan County | AA+ | Stable |
Chippewa County | AA- | Stable |
Clare County | AA- | Stable |
Clinton County | AA+ | Stable |
Crawford County | AA- | Stable |
Delta County | AA- | Stable |
Eaton County | AA | Stable |
Genesee County | A+ | Stable |
Gladwin County | AA- | Stable |
Grand Traverse County | AA+ | Stable |
Gratiot County | AA | Stable |
Hillsdale County | A+ | Stable |
Huron County | AA- | Stable |
Ingham County | AA | Negative |
Ionia County | AA- | Stable |
Iron County | AA- | Stable |
Isabella County | AA- | Stable |
Jackson County | AA- | Stable |
Kalamazoo County | AA+ | Stable |
Kalkaska County | AA- | Stable |
Kent County | AAA | Stable |
Lapeer County | AA | Stable |
Livingston County | AA+ | Stable |
Mackinac County | AA | Stable |
Macomb County | AA+ | Stable |
Manistee County | AA- | Stable |
Marquette County | AA | Stable |
Midland County | AA | Stable |
Monroe County | AA | Stable |
Muskegon County | AA | Stable |
Newaygo County | AA- | Stable |
Oakland County | AAA | Stable |
Ogemaw County | A+ | Stable |
Saginaw County | AA- | Stable |
Sanilac County | AA- | Stable |
Shiawassee County | A+ | Stable |
St. Joseph County | AA- | Stable |
St. Clair County | AA | Stable |
Tuscola County | AA- | Stable |
Van Buren County | AA | Stable |
Washtenaw County | AAA | Stable |
Wayne Charter County | A+ | Stable |
Wexford County | AA- | Stable |
This report does not constitute a rating action.
Primary Credit Analyst: | Diana Cooke, Chicago +1 3122337052; diana.cooke@spglobal.com |
Secondary Contact: | John Sauter, Chicago + 1 (312) 233 7027; john.sauter@spglobal.com |
Research Contributor: | Shripal Nahar, CRISIL Global Analytical Center, an S&P affiliate, Mumbai |
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