With the state House’s recent approval of an 11% cut in municipal revenue sharing for the coming fiscal year, Michigan municipalities began bracing for a sizeable blow to their budgets. Facing some of the more drastic cuts in the state are its urban core cities, which face cuts from the hundreds of thousands to several millions of dollars. These funds are used to pay for police, fire services, and other city functions, and city officials across the state are warning that public safety could be affected by the cuts. This Thursday, the House voted to restore the funds, but they could be cut yet again as the legislation makes it way through a Republican-controlled Senate..
Prior to the vote taking place, Mayor Virg Bernero of Lansing had estimated that at least 30 jobs would have to be cut from the police or fire departments in order to deal with the cuts. The city faces a hole of 2.1 million dollars in its budget this year if the cuts make it past Governor Jennifer Granholm. In late September, Bernero called such cuts “unacceptable, reckless, and unconscionable.” In a statement released by the Michigan Municipal League, the mayor also accused the legislature of “passing the buck” to municipalities, believing that the state should own up to its own spending problems, rather than burdening counties, cities, villages, and townships.
Other municipalities are also making the case to preserve current funding levels. Democratic State Representative Roy Schmidt of Grand Rapids, who campaigned in 2008 on a platform that included the protection of revenue sharing, says the city could stand to lose 2.5 million in the coming fiscal year. Greg Sundstrom, Grand Rapids’ newly appointed city manager, urged legislators in an email to maintain the current funding levels, as the city is “teetering on insolvency.”
Republican State Representative Kevin Green of Wyoming and State Senator Bill Hardiman of Kentwood, however, were not making any promises, despite their prior service as city councilman and mayor, respectively, of Grand Rapids’ two largest suburbs.
“We have to make cuts,” stated Bill Hardiman. “We will try to do so in a thoughtful manner, but we are split across so many areas.”
Hardiman also said that he could not guarantee anything for cities when large cuts were already being considered for education and the state police.
In Flint, it was estimated in May that the cuts would leave place city another $1 million in debt, but nothing further has been said regarding the impact of such measures on the city.
It is in Detroit, however, that the biggest cuts are being faced. The state has already withheld $11 million in revenue sharing funds allocated to the city, due to its failure to punctually submit its annual audit. The cuts passed by the House could very well cost the city $38 million a year, according to the Michigan Messenger. Mayor David Bing’s office, however says it will wait until the final passage of the cuts before it begins to consider a course of action.
While the position of being staunchly against municipal revenue sharing does not seem to be a popular one among legislators, it is a position that still has been advocated. The Detroit News recently published an idea from the Mackinac Center for Public Policy, a free-market think tank, which calls for eliminating revenue sharing completely, returning the money to tax payers as a refund on their education tax, and then allowing municipalities to either raise their own property taxes or survive without the funds. Click here to read more.
The Michigan Municipal League, on the other hand, is urging Michigan citizens to ask the legislature not only to take revenue sharing off the chopping block, but to also find a permanent solution to the problem, so that the kind of cuts faced by municipalities in the state budget do not continue to be an annual affair.
An explanation as to how municipal revenue sharing payments are calculated can be found here.
The Detroit News
The Flint Journal (via mLive)
The Grand Rapids Press (via mLive)
The Lansing State Journal
The Michigan Messenger
The Michigan Municipal League