Attitude Regarding Revenue Sharing Is Deplorable

March 6, 2006
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It would appear state legislators are exceedingly cavalier about the profound effect of refusing to share the revenue that belongs to cities across Michigan. Gov. Jennifer Granholm has indicated she would hold cities "harmless" from additional cuts in the next state budget, and the Republican-led House and Senate have repeated such promises, as though that is good news. The state has basically found a way to further tax the citizens and businesses of Michigan without expressly calling it a tax hike.

Grand Rapids city commissioners last month passed a resolution requesting that the state honor its constitutional pledge to return 24.2 percent of the sales revenue taxes collected by local units of government and is joined in its outrage by every surrounding city. Grand Rapids saw just 15 percent of its revenue returned last year. Wyoming and now Kentwood are fervently attempting to look at other sources of revenue, such as payment for police services by individuals in the unhappy circumstance of a vehicular accident. The city of Grand Rapids has some savings in its city income tax, but neither of Grand Rapids' close neighbors have such a safety net (if it can be called such). The additional costs and financial burden to the taxpayers is caused by the state legislature; it's an added tax.

State Sen. Bill Hardiman, a Kentwood mayor for 10 years, told the Business Journal that as a former mayor he "knows what (revenue sharing cuts) mean" but seemed satisfied at holding the line at any further cuts. State Rep. Jerry Kooiman has made similar comment.

It may be that these representatives of area communities will have no home to come back to as various essential city services continue to be unfunded for lack of state "sharing." That these representatives are not taking a proactive role in protecting the very communities that elect them is absolutely stunning, and completely out of touch. "So we should be jumping up and down with joy that there is no (revenue sharing) reduction …" noted Grand Rapids Mayor George Heartwell with some sarcasm.

Grand Rapids alone has cut $50 million from its past five fiscal-year budgets. Projections show city leaders will continue to bleed the budget by another $80 million in the next five years.

With every challenge there comes opportunity for change that leads to long-term gains. That has been true for the city in contemplation of its circumstances. Citizen budget committees have been established, benefit policies and payments have finally been addressed. Heartwell told the Business Journal that he believes that at some point "tables turned" and those in the public sector became better paid, and were provided better benefits than their counterparts in the private sector. It is well past time for such review in every community, in the schools — and most especially for state workers, including legislators.

Such action will again balance the budgets of public entities, restore the sharing of revenue, and provide business with an end to its life-long wait for the eradication of the Single Business Tax.    

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