Down to the wire

Michigan Sen. Darwin Booher

Local governments anticipate little change in funding as state lawmakers rush to finish budget

LANSING — State lawmakers are diligently working to meet a self-imposed deadline today to finish Michigan’s operating budget for the 2012-13 fiscal year.

Gov. Rick Snyder presented his budget proposal to the legislature on Feb. 9. Under his proposed budget, Snyder outlines $48.2 billion in revenue, with more than 75 percent devoted to education, health and human services.

At that time, he also offered a 2013-14 projected budget to help policy makers with long-range planning. The state’s fiscal year begins Oct. 1.

“Successfully reinventing Michigan demands that we make thoughtful, strategic and long-term investments in our state that deliver real results for real people,” Snyder said in a press release. “This budget is the platform for creating an environment conducive to job growth, protecting our most vulnerable residents and ensuring that our children have bright futures with boundless opportunities.”

Conference committees have struck deals on most state agency budgets, but as of Thursday, differences remain over public school funding and appropriations to the 15 state universities. The proposed budget includes a $74 million boost in K-12 spending, as well as a 3 percent increase in state aid for public universities.

When the conference committees have reconciled differences in the Senate and House budgets, the appropriation bills must be approved by both houses. A final copy will be presented to the governor for signing.

“We’re very close,” said Sen. Darwin Booher, R-Evart. “You can’t walk through these budgets. … This is a process we’re trying to do in half the time by adopting it in June. … The budget is shaping up as good as anyone could expect.”

One component of the budget centers on two House Republican bills introduced this week to cut the state income tax rate from 4.35 percent of earnings to 4.25 percent on Oct. 1. The acceleration of a planned income tax reduction will provide roughly $90 million in tax relief to Michigan residents next fiscal year.

Additionally, cities and townships across Michigan should expect to see a 2.5 percent to 3 percent increase in constitutional revenue sharing, Booher said.

“We have to be pleased that the state is showing signs of recovery,” Booher said. “Those funds will be used for fire departments, police services, libraries and so on. … Even through it’s a small amount, we want to return it to (municipalities) because they’ve shared in the cuts we’ve had to make in the past few years.”

Although revenue sharing is expected to go up, the City of Big Rapids is not budgeting for an increase next fiscal year, said City Manager Steve Sobers.

The city, which adopted its 2012-13 fiscal year budget on May 7, has budgeted to receive more than $1.05 million in state funding. The city’s fiscal year starts July 1.

“We’ve budgeted just over $1 million in state funding this year, which is down about $400,000 over the past eight years,” Sobers said. “We were pretty conservative on what we budgeted this year.”

The city has more than $7.69 million in projected general fund revenues and more than $7.75 million in expenditures. Officials expect to use the more than $1.35 million in the city’s fund balance to help cover the gap.

With declining state revenues over the past several years, the city has found ways to tighten its budget, including not filling positions when employees retire or find other employment, rather than issuing layoffs.

“We haven’t increased taxes, but we’re down three positions,” Sobers said. “Through this budget year, we expect to be down another one. … When you have 85 employees, somebody typically retires or leaves in a year’s time. There’s not been a single year that I’ve been here that at least one person hasn’t turned over.”

At the county level, Mecosta County Administrator Paul Bullock said it is too soon to determine if any changes in the state budget would fully fund revenue sharing for county governments, but anticipates reductions in funding. Any financial decisions for the county’s 2013 fiscal year budget will be made by county commissioners, he added.

“The only question we have at this point is how big is the reduction going to be in revenue sharing,” Bullock said.

The Mecosta County Road Commission is unsure how it will be affected by the proposed state budget, said Joyce Randall, managing director.

In the past few years, the commission has budgeted for a 5 percent decrease in state funding. Randall has budgeted for the same percent decrease this year because there hasn’t been any changes to current or new sources of revenue, including the gas tax.

“We aren’t anticipating anything because we have been in this position before,” Randall said.

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Posted by Jonathan Eppley

Jonathan Eppley is news editor for the Pioneer. He designs and copy edits the Pioneer daily, and manages staff in the evening. Eppley joined the Pioneer staff in 2010. He can be reached at (231) 592-8357 or at jeppley@pioneergroup.com.

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