Lansing Is Eyeing County Funds

June 11, 2004
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GRAND RAPIDS — The odds are probably better than even money that lawmakers and the Granholm administration will eliminate revenue sharing for the state’s 83 counties in the upcoming fiscal year.

If that happens, counties will lose a total of $183 million for FY05. And, understandably, that scenario doesn’t sit well with Kent County Commission Chairman David Morren.

“It’s another unfunded mandate as far as I’m concerned,” said Morren at a recent meeting of the Grand Valley Metro Council.

If the governor and legislators erase that revenue source for counties, Kent would stand to lose about $10 million it had counted on and feels it has coming. The county is looking at a $6 million shortfall for 2005 even with those dollars.

“It appears this idea, barring any changes, has legs,” said Don Stypula, Metro Council executive director.

Morren said wiping out revenue sharing would be another action among many the state has taken to push its responsibilities onto local units. Morren felt that lawmakers and Gov. Jennifer Granholm need to define their duties better and act accordingly.

“I never like to sell off the future for today, and that’s what they’re doing,” said Morren.

In return for losing the funds, property tax bills that go out from counties in December would be sent in July. Those collections would go into the state treasury and then counties supposedly would be given access to those dollars.

Critics of that plan have said it would create a cash-flow problem for counties and put a burden on property owners who would be faced with paying their taxes earlier than usual.

Kent County Administrator and Controller Daryl Delabbio said the state wants to phase in the tax-collection plan over three years. A third of the levy would be due starting in July 2005, with two-thirds due in December 2005. Two-thirds would be due in July 2006 with a third due in December 2006. In 2007, the entire tax would be due in July.

“If this is implemented, we don’t ever expect to see revenue sharing again,” said Delabbio.

The Michigan Association of Counties, which had objected to an earlier proposal, may have changed its mind on the issue. Stypula said MAC hasn’t taken a formal position on the latest version yet, but he noted that the group’s chief lobbyist said his board was “very pleased with these new changes.”

In addition, the Republican chairman of the House Appropriations Committee seems to support eliminating the fund for counties. Rep. Marc Shulman, R-West Bloomfield, told reporters recently that voiding revenue sharing was an important step in reducing local governments’ reliance on the funds.

Stypula added that if counties lose their portion of revenue sharing, cities, townships and villages also are likely to have a similar formula applied to their share as well.

In March, Kent County Fiscal Services Director Robert White estimated the county would likely see $4 million disappear if the state changed the current formula. Instead of getting $10 million, White felt the county’s portion would be closer to $6 million.

“The real advantage in this is it’s better than zero,” said Morren, “— perhaps.”           

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