County to take its case to Lansing
Gov. Rick Snyder’s $48 billion spending plan for the state’s next fiscal year is roughly 2.5 percent more than can be found in this year’s budget. But Becky Bechler of Public Affairs Associates told the Kent County Legislative Committee last week that the governor has raised more questions with his budget than he has provided answers.
“There are a lot of challenges for Kent County,” said Bechler, whose firm lobbies at the state level on behalf of the county.
The biggest challenge for the county — and likely for all counties — is its share of statutory revenue sharing. Kent was hoping the governor would keep the county “whole” in his budget regarding revenue sharing, but the opposite happened. Bechler said Kent won’t receive its full share because Snyder only allocated $147 million in his 2013 spending plan for counties — $20 million less than this year.
A smaller allocation likely means that instead of the county receiving $12 million from the state in the next fiscal year — its entitled share via the statutory formula — Kent will probably get closer to $9 million and will have to make up the revenue difference on its own or make budget cuts.
“This administration is moving to an incentive-based system,” said Bechler.
But Bechler added that the state hasn’t recognized how proactive the county was in cooperating and sharing services with other governmental units before Snyder took office last year, and substituted monetary rewards, in lieu of revenue sharing, for actions the county has already taken.
Bechler said Snyder committed $25 million to the incentive fund in his budget and added counties to the governments that could qualify to collect a portion of that revenue. Only cities and townships are eligible this year because their entire statutory revenue sharing was eliminated from the budget, while those dollars for counties were reduced.
County Administrator and Controller Daryl Delabbio said the payout from the incentive program is based on three factors: a government’s financial transparency and accountability, its collaborative efforts with other units, and employee compensation.
“I’m a little bit concerned about that,” he said of the last issue. “The state hasn’t recognized a couple of things.”
Delabbio said those “things” are that most county employees have the highest contribution rate to their pension plans in the state, with many contributing 7.5 percent, and that the county has made significant changes to its workers’ health insurance plans that have reduced Kent’s cost for coverage.
“We’re not sure those things are being recognized by the state,” he said. “We have to address this. Mr. (John) Nixon (state budget director) is the key. We have to get to him. He has the governor’s ear. We can still apply for the $25 million.”
To underline the importance of revenue sharing, committee members agreed last week that their top legislative priority at the state level is a full restoration of that revenue source for counties. Kent was promised that would happen in 2011 after lawmakers shifted property tax payments from winter to summer in 2004. But the promise wasn’t kept. Running a close second on the priority list was ending unfunded mandates.
“Since the county is dependent on revenues from the state, the priorities for the county must first and foremost revolve around preserving and protecting revenues to enable us to provide the services our community demands and deserves,” said Commissioner Carol Hennessy, vice chairwoman of the Legislative Committee. “Statewide issues require statewide solutions.”
In all, the committee listed 14 priorities including: legislation that would let the county opt out of many taxing jurisdictions, such as downtown development authorities; a capping of the amount of revenue these jurisdictions can collect from the county’s property tax; exempting dedicated millages from tax capture by these jurisdictions; and having the ability to withdraw from a DDA when its term is extended.
Among those 14 priorities were two new issues the committee saw as potentially costing the county more revenue.
“Kent County supports legislative efforts to eliminate the personal property tax if there is complete replacement funding for local units of government,” said Commissioner Dan Koorndyk, who chairs the committee.
The county currently collects $9.9 million from the PPT; roughly $7.9 million of that goes into general operations, while the remaining $2 million is allocated to the funds for the corrections and senior millages.
The other new issue forces the county to pay attorney fees for defendants who can’t afford a lawyer in the state’s circuit court system. Snyder put together a commission last year to investigate the issue, and its recommendation is due this summer.
“Kent County supports a favorable legislative solution that does not redirect revenues currently received by the counties to support operation of the state’s court system, including indigent defense,” said Koorndyk, “and expects that if any legislative solution or court-ordered or negotiated settlement is considered, that counties would be included in the discussion.”