Municipalities having difficult time with budgets
Michigan Governor Rick Snyder knows that municipalities are having a difficult time balancing their budgets and as a result many services they typically provide have been cut in order to keep finances in check. In his newly proposed budget, Snyder allocates money that would increase the state’s revenue sharing and Economic Vitality Incentive Program (EVIP) money distributed to the states smaller government bodies.
Snyder intends to increase revenue sharing with counties back to 100 percent, after they were cut more than $6 billion since 2001. Cities and townships could get a three percent increase in Constitutional Revenue Sharing as well, if and when the legislature adopts the 2015 budget.
In 2013 the county received $558,409 from the state in Constitutional Revenue Sharing and EVIP funds combined. That is a large dip from the $701,205 in 2011. Treasurer Kim Ludlow said she is unsure how much added money the county could get if the governor gets his way, but no matter the amount it is nice to have to the added revenue. The county’s 2014 budget started with more than a $400,000 deficit.
“Things are very tight and and we’re running in a deficit, so any increase in revenue is good, because right now we are looking at more cuts, so that added money is good,” Ludlow said. “After all the cuts that have been made, if we can get a little more state revenue here, it will really help.”
During the budget process, the Alpena County Board of Commissioners budgeted $581,845 for the revenue from the state. If increased to prior levels, the amount of revenue sharing received could exceed $700,000 as it did in 2009 and 2006. At its lowest point since 1976, state revenue dipped to $365,316 in 2005 and $380,384 in 2010.
The City of Alpena is not in line for a large increase in revenue sharing, but if the proposed 2015 state budget is passed, it could see a three-percent bump in Constitutional Revenue sharing and possibly 15 percent in its EVIP revenue if it meets new requirements Snyder has proposed pertaining to communities struggling with high unemployment rates and crime. At minimum, the city will see an increase of about $25,000 if the governor’s budget is approved. Clerk/treasurer Karen Hebert is still in the process of learning what will be required to claim the EVIP funds, but she said if that were to increase by 15-percent that would equate to about $50,000. She said in a time where revenues are shrinking and expenses are growing, any additional money the state can make available is appreciated.
“Any increase is an increase and maybe now we’re will be able to see the trend go the other way, instead of just being cut,” Hebert said. “Property Tax is beginning to go back up, revenue sharing may be going back up, at least we look like we’re beginning to go the right way now.”
As of 2014, the maximum amount the city can receive is $338,000, if it meets all of the requirements to capture it. Hebert said if Alpena is eligible for the extra 15 percent, it will help pay off some debt and some of the long term liabilities.
“We could use it toward our post retirement health care and some of the things we are under funded in right now,” Hebert said.
Not knowing exactly what the total increase could be, once approved, could make it difficult for the county and city to prepare the 2015 budget. The city’s budget year is July 1 through June 31, while the county is the more traditional Jan. 1 through Dec. 31. The state needs to have its budget balanced and adopted no later than Oct. 1, and it runs through Sept. 30.