County Loses More State Tax Revenue

August 5, 2007
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GRAND RAPIDS — The loss of state revenue sharing isn’t the only financial hurdle imposed by Lansing that Kent County has to clear.

County commissioners can add another $3.2 million to that barrier from money the state decided to keep instead of distributing it to the county. The funds were to have come from the 4 percent statewide liquor-excise tax.

County commissioners recently passed a resolution that deleted those dollars from the intergovernmental budget for this year. That action came more than halfway through the fiscal year.

“I hope this is a one-year resolution,” said Commissioner Nadine Klein.

“It’s a sad day when we have to do this,” added Commissioner Marvin Hiddema.

Lawmakers decided not to distribute the tax receipts to help balance the state’s 2007 general operating budget. But they said they hope to restart the distribution next year.

Revenue from the tax is expected to total $50 million this year. About $34 million was to have been distributed to the state’s counties; Kent’s share was $3.2 million.

Kent County was going to keep half of the revenue and send the other half of the $3.2 million to network 180 to support substance abuse programs in the county. But without those state dollars, county commissioners eliminated the allocation to network 180 for this year.

Project Rehab’s Michael Reagan said a loss of those dollars would result in a 20 percent cut to those programs. Project Rehab also offers treatment for substance abuse.

The county was going to deposit the other $1.6 million into its intergovernmental budget, which is part of the general fund. All the revenue to that budget comes from governmental units, and nearly $13 million was forecast at the start of the fiscal year.

State law requires each county to give half of its liquor-tax receipts to the state-designated coordinating agency for substance abuse programs in a county, and network 180 is that agency in Kent County. Klein chairs the network 180 board.

The loss of the liquor tax receipts will increase the county’s 2007 general fund deficit from $2 million to $3.6 million, which will mean the county will have to transfer another $1.6 million from its unreserved balance in the general fund to the fund at year’s end.

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