The Kent County Board of Commissioners has begun studying a proposed 2016 budget, reflecting departmental requests that would put the total $7.04 million higher than the 2015 budget, just to maintain existing programs and personnel.
General fund revenues are anticipated to be up only $4.89 million in 2016, however, so the commission will be looking to cut $2.16 million from the departmental requests to balance the budget without resorting to a tax increase.
With the departmental requests, the total general fund budget proposal for 2016 is $167 million; commissioners want to pare that down to approximately $165 million.
The amended general fund budget currently in place for 2015 totals $160 million, which was actually below the 2014 budget by about $680,000.
Tax revenues are on the rise again, allowing for a larger budget, but County Administrator/Controller Daryl Delabbio said the problem is that while property values are returning to their pre-recession levels, it is not happening nearly as fast as costs of government are increasing.
The commission’s Finance and Physical Resources committee last week discussed the fact the Kent County government is not charging as much in property tax as it is legally empowered to charge — but any talk of increasing the millage rate sparks controversy on the board. The board could raise the millage rate by 0.04 of a mill, to a total of 4.32 operating mills. The increase of 0.04 mill would generate an additional $800,000 or so.
Delabbio said that, in August 2008, voters approved maximum operating millages for Kent County government, plus the townships, school districts and the Kent Intermediate School District. The maximum operating millage for the county government, as approved by the voters, is 4.8 mills. However, as a result of the Headlee tax limitation amendments to the Michigan Constitution in 1978, the maximum operating millage has been rolled back to a current limit of 4.3203 mills.
Even then, however, “the county has not levied the total authorized maximum millage. The current operating millage is 4.2803 and has been since 2004,” said Delabbio.
Altogether, voters approved a total Kent County millage rate of 5.6196, which also funds corrections/detention, senior services and services for military veterans.
County commissioners are determined “to make sure we are delivering services in the most efficient and effective way possible,” before considering a tax hike of 0.04 of a mill, vice chair Jim Saalfeld told the Business Journal.
Saalfeld said the first step now is for close scrutiny of what the departments are requesting, compared to the Finance Department’s estimates of 2016 revenues. Then Delabbio will go back to those departments to work with them on fine-tuning their requests.
Personnel costs in the proposed 2016 budget are up $2.54 million compared to the prior year. Delabbio said the major contributing factors are an increase of $1.34 million, or 2.4 percent, in wages, plus a $1.2 million, or 10.7 percent, increase in group health insurance.
Saalfeld, who chairs the Finance and Physical Resources committee, said he serves on several boards in the community that go through an annual budget process, “and it’s the same issue in every one of those — how much health insurance costs keep going up every year.”
He said the county departmental budget requests for 2016 are practically flat when viewed as a percentage of funds expected to be available.
“Nobody’s being piggish,” he said.
In the departments’ proposed 2016 budget, personnel costs are $83.9 million, or about 50.2 percent of the entire general fund budget. In 2015, personnel costs are $81.4 million, about 50.8 percent of the total budget.
Kent County now has approximately 1,700 full-time-equivalent employees.
The second largest type of cost in the county budget is contractual services, which total $47.6 million in the current year, or about 29.7 percent of the total budget. The preliminary proposal for 2016 would budget $49.7 million, or 29.7 percent of the total.