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Kent Scrambling For Funds
GRAND RAPIDS — County commissioners got a bit of bad financial news, along with a bit of good financial news, recently.
And then they got some downright scary financial news.
First, the bad news: Commissioners found out that the current fiscal-year general fund deficit would be nearly $900,000 higher than they expected. A review in April had that account as being $4 million in the red, so it should edge closer to $5 million by year’s end.
The good news is commissioners can expect another $3.1 million in revenue for the next fiscal year, which starts on Jan. 1. Those additional dollars will cut the expected general fund shortfall for 2005 from $6.1 million to $3 million.
Both changes, the good and the bad, correlate with shifts the state made to property tax collections. One-third of a payer’s total bill will be due next summer, with the rest due next December.
The payment-date change means the county will get its revenue at different times and now has to set up a revenue sharing reserve fund to compensate for the lack of revenue sharing money that was eliminated by the new law.
And for the next two years, through FY2006, the change looks good for the county. The revenue sharing reserve fund should reach $32.6 million in 2005 and $47.6 million in 2006 and revenues are projected to top expenses by more than $14 million in each year.
After 2006, however, the news gets scary.
In 2007, the reserve will still be at $37.7 million. But the fund’s expenses will be $9.9 million higher than its revenue that year.
In 2008, the reserve dips to $27.2 million, with expenses exceeding revenue by $10.4 million. Then in 2009, it freefalls to $16.2 million, with expenses exceeding revenue by $11 million. And in 2010, the reserve fund bottoms out at $4.6 million. That year expenses are expected to top tax revenue by $11.6 million.
All this means that from FY2007 to FY2010 the county may need to pump $42.9 million into its revenue-sharing reserve fund.
The new state law that stopped revenue-sharing payments to counties is supposed to expire in 2010.