GRAND RAPIDS — No one called it election extortion. Nor did anyone suggest that smokers should be taxed to make up for the loss of local revenue.
But it was clear that a recent decision by Gov. John Engler to eliminate $845 million in statutory revenue sharing funds — 55 percent of the money the state has earmarked for cities, counties and townships — has angered local officials.
In fact, the Grand Valley Metro Council, an alliance of 32 governments, unanimously called for state lawmakers to override the governor’s veto — the first time the council has taken that action in its 12-year history — and added its distaste for the move Engler made.
Metro Council Executive Director Jerry Felix said the governor’s veto wasn’t just a dip into the local revenue sharing pot, but a complete draining of it. He said the veto violated a partnership — and the trust — the state has with municipalities.
Byron Township Supervisor Larry Silvernail compared the recent action to unfunded mandates issued by the governor’s office in the past that stressed local budgets. He said the governor’s latest move has “destroyed the budgets of hundreds of local municipalities.”
Cedar Springs City Manager Ron Howell remarked that the state has spent the past few years shoring up its budget by making local governments pay for more functions.
“Now they pull the rug out from under us by taking away all statutory revenue sharing funds,” he said. “Most jurisdictions won’t be left with enough money to provide basic public services, let alone increased security measures that have become necessary since Sept. 11th.”
Kent County and the City of Grand Rapids will lose almost $30 million from the veto.
The county stands to lose $15.6 million in revenue sharing funds. This year’s budget will be $4.9 million short if the veto stands because the state’s fiscal year starts on Oct. 1, while the county’s begins on Jan. 1. The county will be $10.7 million short for the next fiscal year.
Kent Administrator and Controller Daryl Delabbio said the county wasn’t too concerned about the monetary loss for the short term, but was worried about the long term. A loss of $10.7 million each year for 10 years becomes a loss of $107 million.
“The county won’t be looking at service cuts,” he said. “But we are certainly going to be closely scrutinizing discretionary programs, things that we are not mandated to provide that we do provide.”
Delabbio said a few of the changes the county may make could be allocating less money for parkland acquisition and development, and financing the purchase of 82 Ionia Ave. instead of paying cash.
“Because we can leverage our money,” he said of borrowing for the building. “We get a higher interest rate on our investment than we can borrow for right now.”
County commissioners are due to see the upcoming fiscal budget later this month.
The city will be short more than $14 million in general fund revenues for this fiscal year, which began on July 1. City manager Kurt Kimball said the veto could mean nearly 200 job cuts, including 76 cops and 48 firefighters.
“It’s a strike to the heart on how we deliver services,” he said. “We ought to be mad as hell.”
When commissioners adopted the city budget in June, Kimball said state legislators from the area told him that the cigarette tax increase, which went into effect last Thursday, would guarantee that the revenue sharing dollars would be secure.
As for other locales, Kentwood will lose more than $1 million; Walker will be $623,000 short; Grandville $471,000; Ionia $900,000; Wayland $204,000; and Gaines Township will lose nearly $300,000.
The override vote is set for next week, if the leaders of both chambers allow it to be taken. Both are Republicans. The Metro Council may bus a coalition of their members to Lansing for the vote in an effort to put pressure on lawmakers to override. The veto did not affect $680 million in revenue sharing the constitution mandates.
Engler said he vetoed the revenue sharing funds to keep the state budget balanced on the chance that three November ballot proposals could affect it. The governor said he would reinstate the money if the proposals were defeated at the polls.
“It’s a sad commentary,” said Howell, “that the governor chose to end his term of office on this note.”