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County likely to adopt smaller budget this week
Kent County Commissioners are likely to adopt the 2012 operating budget Thursday.
The good news about next year’s general budget is it appears to be balanced, but only after $158,000 of the fund’s $1 million subsidy to the county’s lodging-excise tax account was pulled back into it.
The bad news is the 2012 spending plan is $5 million less than this year’s. County Administrator and Controller Daryl Delabbio said the cut was necessary because tax revenue for next year is expected to be $2 million less than this year and state revenue sharing will be $3 million less.
“We haven’t grown out of this yet. We haven’t grown out of it, but we have taken steps to reduce our costs,” said Delabbio. Those steps have resulted in spending being reduced by $20 million over the last five fiscal years, including next year.
The $160.5 million 2012 budget eliminates 25 positions, the equivalent of 21 full-time jobs; 19 of those are currently vacant.
“There are a lot of people that put this (budget) together,” said Delabbio. “I just deliver the message, and my message this year is we have a balanced budget.”
Delabbio also said the current operating budget of $165.4 million should show a modest surplus. At the third-quarter mark, total revenue to the budget was up by sixth-tenths of a percent, largely due to a higher revenue-sharing payment of $11.1 million that was $440,000 above expectations. But total expenditures were up by 2.3 percent, led by higher pension and workers’ compensation costs.
The 2011 budget was projected to have a deficit of $80,500, but higher tax revenue to the lodging-excise tax account could erase a portion of the shortfall because the county may not have to transfer its entire planned subsidy from operations to that fund.
“Given the current trend, we will not need to transfer the entire $2.1 million,” said County Fiscal Services Director Stephen Duarte.
Still, there was a slight funding disagreement at the commission’s last meeting over allocating $15,000 for a study that the consolidation subcommittee wants done by the Upjohn Institute for Employment Research regarding One Kent Coalition’s proposal to merge the county with the city of Grand Rapids. The subcommittee wants Upjohn to determine the economic impact of such a merger and to review the outcomes of similar mergers.
Commissioner Stan Ponstein opposed the allocation. “This is about One Kent. Why doesn’t the state do the funding?” he asked. Ponstein explained that County Purchasing Director Jon Denhof didn’t need a committee to come up with the successful reverse auction, which has saved the county money. He said funding the study was a waste of taxpayer dollars and noted that the county has been cooperating with other governments for more than 20 years. “We don’t need this study,” he said.
But Commissioner Roger Morgan disagreed. He said there is a difference between cooperation and a forced merger. He also saw the coalition’s proposal as part of the state’s overall attack on local units of government, which has included cuts to revenue sharing, unfunded state mandates and the threat of losing other tax and state-funded revenue. “I think we need to be proactive. We need this study,” said Morgan.
Commissioners approved the funding allocation, which will come from this year’s reserve fund, and the consolidation subcommittee also is scheduled to meet this week.
Over the upcoming fiscal year, Delabbio said he has four concerns: the future direction of state revenue sharing; the personal property tax, which lawmakers are looking to eliminate and nets the county $9.9 million annually; the state’s settlement of its mismanaged foster-parent program a few years ago; and the lodging-excise tax fund, which is seemingly in a perpetual deficit mode due to tax receipts that can’t keep pace with a rising bond payment for DeVos Place.
“We have to be looking ahead. There are some major changes coming, none bigger than the personal-property tax,” said Commissioner Harold Voorhees, who chairs the Finance Committee.
“I don’t think we should spend money just because we have it,” said Commission Chairwoman Sandi Frost Parrish.
“All we’re doing is being proactive and keeping our triple-A bond rating. As I look around, we’re cost effective and cutting edge,” said Commissioner Gary Rolls. “I think we’re in a position here that other communities would love to have, and it’s by design and plan,” said Morgan.
“(Taxpayers) expect us to be as prudent with our dollars as they are with theirs. This budget is a good budget. We have to realize that we have 19 people putting the budget together and we all have to compromise,” said Commissioner Dan Koorndyk.
“There are some things that we can do proactively,” said Commissioner Tom Antor.
The four issues Delabbio listed can’t be directly controlled by the county. There is one, however, that he said the county does control, and he plans to do something about it next year.
“I’m a bit concerned over our IT infrastructure,” he said. “We haven’t kept up with it as we should have. In 2013, I plan to roll out a program to do that."