County Counting On Lower Revenue

August 9, 2002
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GRAND RAPIDS — Kent County Administrator Daryl Delabbio said last week that $10.7 million in expected revenue should be struck from the 2003 budget, but he added that planned expenditures should not be touched.

Delabbio made his comments last Tuesday to the county Finance and Physical Resources Committee as a response to Gov. John Engler’s veto of $845 million in statutory revenue sharing money to cities, counties and townships.

The county only receives statutory sharing, unlike cities and townships, which also get the revenue sharing mandated by the constitution, and Kent’s cut was expected to be $10.7 million for its next fiscal year.

“Right now, we’re saying let’s continue with the budget as it stands,” said Delabbio.

The governor’s action, if left unchecked by state legislators, would also result in a loss of $4.9 million for the county this year because the state fiscal year begins on Oct. 1 and the county’s starts on Jan. 1.

Should the House and Senate muster enough votes to override Engler’s veto, the revenue-sharing dollars would be reinstated into the budget. But if the veto stands, the county will dip into its general fund to replace the lost revenue and also look at cutting some of its discretionary spending.

Delabbio told commissioners that the county might finance its purchase of the building at 82 Ionia Ave. SW instead of paying cash for it because interest rates are low enough that its return on investments can make up the difference. The county agreed to pick up its option on the office structure for $5.5 million this summer, but has until March to close on the deal.

“We are reviewing all options for either reducing or limiting expenditures, but we need some time to determine if a) the revenue sharing funds will be restored, and b) what the real impact will be on Kent County,” wrote Delabbio in a memo to committee members.

But if the funding isn’t restored, the county may not add any new positions in 2004.

Commissioner Katherine Kuhn felt it was unlikely that the county would get its full share of revenue-sharing dollars next year regardless of the outcome on the override vote because of the state’s dismal financial condition.

“Revenue sharing is not going to be the saved no matter what happens in the election,” she said. “There will be some cuts.”

County commissioners passed a resolution last week urging area lawmakers to override the veto, a vote that is being taken tomorrow. The Grand Valley Metro Council has put together a bus caravan that will take local officials to Lansing for the vote.

“I’ve been working for an override,” said State Rep. Jerry Kooiman, a former county commissioner, to committee members last week. He called Engler’s veto “draconian, at best.”

As part of the budget review, Delabbio reported that the county’s three millage rates would drop by 0.09 mills for next year to 5.3140 mills. The dip, however, wouldn’t reduce the amount of revenue coming to the county in 2003 because the State Equalized Value on properties in the county, which the millage rates are based on, has risen.

In fact, the SEV has gone up by $1 billion over the past six years.

The increase has come from inflation and growth. The Headlee Amendment to the state constitution only limits its increases to inflation, and not growth from new developments or improvements to properties.

County commissioners will get their first look at the budget on Thursday, and they plan to hold a public hearing on it and the millage rates on Aug. 22. Board members are hoping to adopt the 2003 budget on Sept. 26.    

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