Countys 2011 spending plan faces adoption
If Kent County Commissioners adopt the 2011 general fund budget in its current form Thursday, it will mark the first time since 2001 that the county won’t have to dig deep into its reserve account to balance the spending plan.
“The proposed general fund budget is balanced,” said County Administrator and Controller Daryl Delabbio at the recently held public hearing on the $165.1 million spending plan. “It maintains services and programs, and it does maintain a competitive wage and benefits package for our work force.”
Commission Chairwoman Sandi Frost Parrish has urged commissioners several times in the past few weeks not to make changes to the proposed budget prior to adopting it.
“Our citizens are demanding that we have a structurally balanced budget,” she said of the financial plan that takes fewer than $14,000 from the reserve. “I hope that you will keep that in mind.”
However, some commissioners want to make a few changes. Commissioner Bob Synk would like the board to dig deeper into the fund’s $9 million reserve or its $21 million emergency fund to keep about 30 county employees from being laid off at the end of this year, avert raising admission fees by a dollar at the zoo next year, and fund the Purchase of Development Rights program at $350,000 instead of the $275,000 that is in the budget.
“Perhaps, just $1 million will be enough to save those jobs, stop the fee increase at the zoo and fund the PDR,” he said.
Commissioners Keith Courtade and Bill Hirsch also want the farmland preservation budget increased by $75,000. Hirsch pointed out that the county needs to spend $350,000 on the program next year to be able to collect grant money for the program from the Grand Rapids Community and Frey foundations. Hirsch said the county’s additional $75,000 would generate $185,000 in PDR funding from the two foundations. Parrish, however, said she was trying to get the foundations’ management to pro-rate their gifts to the preservation effort, instead of having both grants be an all-or-nothing match.
The commission agreed a year ago to fund the program with $1 million over three years, an effort Parrish strongly supported. But $275,000 was budgeted for it this year and is the current figure for next year, so it’s unlikely the entire $1 million will be spent over three years. Parrish told the Business Journal that it was acceptable to her if it took the county four years instead of three to fund the program at $1 million.
Delabbio said a key reason as to why the budget is balanced is that the state has pledged to give the county a full revenue-sharing payment next year. But he added with the $1.5 billion deficit the state budget is facing, and with a new governor and a host of new lawmakers taking over in January, he is concerned that promise may not be kept once work on the state budget begins.
“I think revenue sharing will be an annual battle. It’s $12 million to our general fund,” he said.
Delabbio said he was also worried about the county’s growing subsidy to the lodging-excise tax fund, which has been targeted to make the bond payments for much of the convention center’s construction tab. Next year’s payment is more than $5 million, and collections from the tax may not even reach that figure, let alone cover the bond payment and the financial support the county gives to Experience Grand Rapids and the West Michigan Sports Commission. The county transferred more than $500,000 from the general fund to the hotel-motel tax account last year and $1.8 million this year, and has $2.1 million budgeted for it next year.
Experience GR President Doug Small said room revenue at the county’s hotels topped $10 million in September and October — the first time in recent memory the lodging industry has exceeded that number for two consecutive months. He said room revenue this year was up by 9 percent from last year — twice the industry’s national average.
“We are filling the coffers,” said Small.
With most of the county’s revenue coming from property taxes, the county’s equalization director had some bad news at the public hearing. Matt Woolford said he doesn’t see an increase in property values coming anytime soon. He said while agricultural values are the most stable, commercial values still haven’t hit bottom. He also said residential foreclosures have to be played out before housing values can stabilize. When home values do settle down, he said it will be at a level lower than the market has been used to.
“I would say it’s unstable and dynamic,” Woolford said of the county’s overall taxable value.
Besides adopting the general fund, commissioners will allocate the revenue received from the Senior Millage on Thursday. This year’s levy raised $6.46 million from property owners, which the Area Agency on Aging will divide among 31 providers for a broad variety of services to the county’s seniors in 2011. That number is down by $187,000 from $6.65 million a year ago.
“This year we’ve got less money to deal with. The last few years, we’ve gotten less money,” said County Commissioner Art Tanis, who felt property-tax capturing groups like downtown development authorities were responsible for the budget getting fewer dollars. “We made some drastic cuts this year to our agencies — about 3 percent.”
County Commissioner Stan Ponstein wants the county to demand that DDAs and other tax-increment financing authorities stop capturing revenue from the Senior Millage because those dollars aren’t being used as voters intended. Several years ago, 11 jurisdictions took over $133,600 from the countywide millage that voters approved in 1998 to help older residents with many of their health, transportation and household needs. Voters renewed the millage two years ago; it will come up for renewal again in 2014.