Public leaders troubled

March 22, 2009
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The single biggest concern Administrator Al Vandenberg has for Ottawa County is that the housing market will continue its freefall and take home values down even more. In fact, he thinks both will happen.

Vandenberg expects that the State Equalized Value for 60 percent of all the homes in his county will be at or below the State Taxable Value this year. And when a home reaches that point, the property taxes are frozen.

A county is heavily dependant on property-tax revenue, and if a majority of homes have frozen taxes, it doesn’t get an increase from that revenue source while its expenses rise.

“We’re predicting that figure will go up to 75 percent by 2010, and 71 percent of our tax base is based on single-family residential properties. That’s our biggest concern,” he said.

But not his only big concern.

Vandenberg is also a bit anxious over the stability of state revenues during a time of extraordinary unemployment in Michigan, a wobbly automotive industry, and deepening deficits in the state’s general operating budget.

He is worried that the state — which requires counties to operate many services, such as the courts, jails, and health departments — will lower or maybe even stop funding its share of those services to fill its budget deficit and then leave counties with additional expenses at a time when their budgets are tight, too.

“A lot of county government is mandated by state government, and we have to do it. The state only provides about 45 cents on the dollar for all the things they make us do. So whenever the state gets into a major economic malaise and starts cutting back on revenue for the counties, they don’t cut back on what they require us to do,” said Vandenberg.

“So that’s another focus we have. OK, you make us do this. But if you don’t want to send the money along, then don’t make us do it,” he added. “So we need more of a relationship between the money and the requirements.”

Declining revenue is the biggest concern that Administrator and Controller Daryl Delabbio has for Kent County. State revenue sharing, though, ranks right up there for him, as well.

Lawmakers stopped making those payments to counties four years ago. But the state is supposed to resume those disbursements to Kent in 2011, and Delabbio is hopeful Lansing will keep its promise.

“The governor has included it in her budget for 2010, and Wayne County goes back on line in 2010. The Legislature has to support that. That’s a commitment that the state made to the counties when it remanded us to move our (property tax) collections from December to July,” said Delabbio.

“The governor has honored that commitment so far. If the Legislature honors it in 2010, then I think they will honor it in 2011 and beyond. That’s $12 million in our case,” he added.

Grand Rapids Interim City Manager Eric DeLong said his biggest concerns are that more residents don’t lose their jobs and the city’s income-tax roll doesn’t suffer further erosion, as that revenue accounts for more than half of the city’s total general fund income.

“So our economic development programs are very important,” he said.

“We’re working to create jobs and growing sectors as well as we can and stabilize employment in those areas that are experiencing difficulty. I think jobs are important because that drives what we can do in terms of providing services.”

While the city has lost a number of manufacturing jobs the last few years, DeLong said the medical industry has added jobs to help balance what has become an employment teeter-totter that goes up one week and down another. He said the city has played an active role in helping hospitals, universities and bio-med companies to grow here through its economic development office and the City Commission.

As for property-tax revenue to the city, Delong said it will be down a little bit this year as evaluations dip. Property taxes contribute about 10 percent of the total revenue to the city’s general fund.

“It is a concern. Income taxes are a significant concern for us and we expect those to go down as people are working less and earning less,” he said. “That’s one of the pressure points on our budget that will make it more difficult to provide the quality of life people want.”

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