County Deficit Less Than Projected

September 28, 2004
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GRAND RAPIDSKentCounty commissioners approved a budget on Thursday for the upcoming fiscal year that they may have to change next month due to action the state took on Wednesday.

With only one dissenting vote, commissioners ratified a general-fund budget of $147.9 million that currently forecasts a deficit of $6.1 million. But because the state House voted last week to go along with the Senate and Gov. Jennifer Granholm and move part of the property tax collection date to next July, the general fund shortfall is now expected to drop to $4.2 million.

The county will use the additional $1.9 million to soak up a portion of its red ink, money that will come from the accelerated tax payments residents will make next summer when a third of their property tax bills will be due. Kent Fiscal Director Robert White said the county will receive $10.5 million in extra tax revenue for 2005 in lieu of the $8.6 million it expected to get in state revenue-sharing funds.

The difference will go toward the deficit, meaning the county won't have to dip into its fund balance quite as deeply as once thought.

"It looks like we might be winners," said Commissioner Dan Koorndyk. "But I don't think we will be."

White told Koorndyk he was correct.

"You're right, there are no absolute winners in this," he said of the state's action.

White acknowledged the change in collection dates was good for the county in the short term. But with revenue sharing for counties in limbo for six years and no definitive plan in place after that period expires, he noted that the county's long-range outlook was sketchy at best. Besides, White said, the $10.5 million the county will receive in 2005 is $3 million less than it got in revenue sharing just three years ago.

"I think it was a very poor public-policy vote," said Kent County Chairman David Morren.

The county went on record this summer as opposing the three-year switch in collection dates, a move that allows Lansing to eliminate revenue sharing to all counties in Michigan. Commissioners are concerned that low-income residents won't have enough funds to make their July payments and may lose their homes. They're also worried that taxpayers will blame them for the financial hardships that some residents and businesses may endure in making the payments.

For property taxpayers, a third of their total bill next year will be due in July with the rest due in December. In 2006, two-thirds will be due in July. And in 2007, the entire payment will come due in July.

As for the county's budget, only Commissioner Harold Voorhees voted against it. He felt the deficit was too large and the county was going too deep into its reserve account to cover the shortfall. Voorhees said the county was spending too much money on fees with groups like the Grand Valley Metro Council. He also felt Kent was investing too much in lobbying efforts.

But Morren credited the Finance Committee, chaired by County Vice Chairman Roger Morgan, and CountyAdministrator and Controller Daryl Delabbio with putting together a budget under tough economic circumstances.

"This probably has been, in my 10 years, the most difficult budget to make. A lot of things had to be cut," said Morren. "I don't think that we can underestimate the vision that Daryl and Roger had."

The county's fiscal year begins on Jan. 1.    

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