State Plans Leave Locals Powerless

July 26, 2004
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GRAND RAPIDS — Kent County Chairman David Morren isn't pleased with how Gov. Jennifer Granholm and state lawmakers have handled the revenue sharing issue.

Morren said Lansing is using a divide-and-conquer strategy that may result in the eventual elimination of revenue-sharing payments to all municipalities.

Under the current proposals in Lansing, revenue sharing for the state's 83 counties would be altered for the next six years. One plan would change when counties collect property tax payments, moving that date from December to July over three years, and how counties would be reimbursed by the state.

The change is seen by the state as part of its effort to balance a deficit-riddled budget.

Right now, Kent isn't sure how much revenue sharing it would get under a change, but it's sure to be less than in past years. Instead of the $11.1 million it was to receive this year under the current formula, County Fiscal Services Director Robert White has estimated that Kent would get either $9.1 million, $7.5 million, or $10.3 million in 2004 — depending on which proposal goes forward.

One cuts sharing to counties by 17 percent, another by 40 percent. But both leave tax collections in December. The third moves that date to July and cuts 7 percent this year and employs a reserve fund that would be created from property taxes collected this December that would be used for revenue-sharing allocations next year. The allocations would be based on whether a county's fiscal year was the calendar year or an October-to-September year.

Morren is concerned about the funding levels, as one would expect, but he also is a bit anxious about what the state will do after those six years have passed.

"The problem is you've got a governor that may or may not be here then, and certainly there will not be one state-elected official, in terms of a representative or senator, that likely will be here to answer that question," said Morren.

"So, it's 'trust me, we're going to remember this and this is our intent.' But yet all those people that we're going to trust and remember will no longer be around. And even if they are around, the circumstances could be so different that they can't be allowed to remember," he added.

"I think it's very poor public policy to leave contingencies hanging out there — and I think this is a huge contingency."

Morren acknowledged that the proposals may be better than not having revenue sharing at all, but wasn't thoroughly convinced of that. He said the plans, one of which is expected to be adopted by Labor Day, make it hard for the county to outline future budgets, services and revenue sources for the coming years.

So, to err on the cautious side, he has told his staff to assume that the county will not be receiving revenue-sharing dollars after the six years run out.

"Once our money runs out for revenue sharing, I don't see it ever coming back again," he said. "I personally think it's an expedient political decision today and I think what it does is it divides and conquers local government."

Morren feels the proposals break up the power base that counties, cities, townships and villages have in their relationships with Lansing, and pits them against each other in a very subtle way. That power, he noted, was visible when local government officials gathered in a Wyoming firehouse last year.

At the event, commissioners, mayors and supervisors were united in their stance that the state's plan to reduce revenue-sharing payments was too drastic. It was a show of unity that helped convince legislators to back off some of the planned cuts. Morren argues that without the solidarity shown by county, city and township officials then, the state will find it easier to make deeper cuts and even eliminate those payments later.

How is the state dividing and conquering? Morren said Lansing is doing this by cutting revenue sharing only for counties this year, while leaving those dollars targeted for cities, townships and villages alone.

"Now that the counties are taken care of, they don't have to cut these other entities, so everyone is happy this year. But what about next year? Next year, they're going to have to whack the cities, the townships and the villages," he said.

"Where are the counties going to be then and where will their huge support be? Well, they won't have a dog in that fight and there won't be anything they can do."

Counties receive statutory revenue-sharing dollars, while cities, townships and villages get the bulk of theirs from the constitutional pot. But these municipalities also get a piece from the statutory pie. Sales-tax revenue largely funds both types, receipts that aren't growing as fast in the Midwest as in other regions.

"In my mind, they have split up, essentially, the power of local government. And I think that is wrong because local government is where it happens ultimately and it's the payer, most often, of last resort. I think that's the method and I don't think it's right," said Morren.

"If you're looking at it purely from a financial standpoint, is this the best of all worlds? I mean, they could choose to eliminate it all today. But even if they did that, at least we'd know what we're dealing with. So I just think it's poor policy."

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