City Budget: Put Sunset On New Fees

May 8, 2006
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Grand Rapids City Manager Kurt Kimball has been recognized by his peers internationally with high honors this past year, but recognizing the expertise with which he has guided the city’s crisis-mode budgeting is more significant. Some portions of the budget proposal, however, amount to double and triple taxing some types of business, and while the need to increase some fees for services may appear necessary now, the city also should agree to “sunset” those fees and fee increases in the future. One highlight is the fact that city and county property values continue to climb, and city income tax receipts will increase by another 3 percent over the next year as the local economy continues to rebound. Still, it is not enough to offset what has been stolen by state legislators from cities across the state in unreturned revenue sharing.

Kimball has been a student of business best practices, and of outcomes-based budgeting, all tools in the city’s process of downsizing. (The city has eliminated 233 positions and 43 more are proposed for cuts in the now pending fiscal year 2007 budget). As has been advocated here, he advised city commissioners to restructure city employee health care benefit and pension programs. It was accomplished with the acknowledgement that the public sector had reached a point of inflated pay and benefits when compared to the private sector. Mayor George Heartwell went so far as to compare it to a bygone era when individuals chose public service over better paying private sector jobs based on civic mindedness, acknowledging it was the wrong path. Generally, Heartwell and Kimball both acknowledge additional cuts in those city offerings will be necessary.

Kimball received requested input from business community leaders who joined a citizens group giving first debate to the quandary created by Michigan legislators who unapologetically have slashed Grand Rapids city revenue sharing by $21 million the past five years.

Government user-fees are repugnant as a hidden tax on business, and those commissioners who routinely balk at business tax abatements should bear in mind that fact. It is increasingly important to maintain the balance that provides options in a city recognized as open to doing business and continued growth of the local economy.

Kimball views the 2007 fiscal year as a “watershed year” and the five-year forecast is even more dismal. He told commissioners, “… we must evolve rapidly into a lean and nimble city that competes in a global environment and delivers a balanced and sustainable future for everyone. … We have a very small window of time to reinvent Grand Rapids into a sustainable city of the future.” Some may believe Kimball to be given to saying the “right” things, but the proof of “walking” that talk is apparent in the endless preliminary planning process he set forth, and in the recommendations for 2007. The Business Journal is encouraged that the learning curve has been accomplished, providing favorable expectations for the future.    

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