Kent To Lose $1.1M From State

December 19, 2003
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GRAND RAPIDS — If the executive order issued by Gov. Jennifer Granholm on state budget reductions holds up, Kent County will receive $10.3 million in revenue sharing funds for 2004.

That total would be down from the $11.4 million the county received this year, and well below the $12.9 million Kent collected in 2001. The drop in revenue-sharing dollars will be felt in the county’s general fund for the coming fiscal year.

A projection delivered last week by Kent County Fiscal Services Director Robert White shows revenue for the fund at just over $142 million and expenses at just under $150 million for a deficit of $7.9 million. The shortfall will be covered by the fund balance, which will begin the year at $82.6 million.

But just two years ago White said that same fund balance stood at $120.7 million, or $38.1 million more than it will be next week.

“You’re still in a stable financial position, but you’re running down your reserves,” said White to members of the Finance and Physical Resources Committee.

White also told committee members that because Granholm decided to make revenue sharing cuts to both the constitutional and statutory distributions, the negative financial impact for the county would be less than initially expected.

At the outset of Granholm’s budget-reduction tour, the governor tested the fiscal waters by only applying reductions to the statutory side of revenue sharing. But she then changed her mind and recommended a 5 percent cut to both distributions.

Kent, like all counties in Michigan, only receives the statutory distribution, which is an amount equal to 21.3 percent of gross collections of the first 4 percent of the 6 percent sales tax. The state’s 82 counties split 25.06 percent of that amount, while cities, townships and villages share the remainder.

But the total revenue-sharing pot is expected to be roughly $655 million for the year, down from the $913 million in 2001 when the account was fully funded. And the cuts made the past few years might not be the last.

“The fear is that they still don’t see the light at the end of the tunnel yet,” said White.

The governor and lawmakers are expected to have the final budget in place toward the end of next month. Kent County’s 2004 fiscal year begins on Jan. 1.    

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