Grand Rapids city commissioners adopted the smallest budget for general operations in more than a decade last week. The $115 million spending plan is the lowest since at least the mid-1990s.
From the second half of the 1990s through 2007, the budget was a minimum of $120 million and as much as $125 million. But despite the city’s clamp on spending this year, revenue to the budget is projected to fall $2.86 million short of meeting expenses for the fiscal year that begins Wednesday.
“Budget making has become a year-round undertaking,” said Mayor George Heartwell.
“It’s been a long and difficult process,” added interim City Manager Eric Delong.
The ongoing recession and the state’s growing unemployment rate has resulted in less revenue to the city from income and property taxes, along with lower revenue-sharing payments from Lansing.
“We’ve solved for $20 million for this budget,” said Delong. “Looking forward, we’ve got a lot of work to do.”
The budget forecast for 2011 has a deficit of $12 million, which would wipe out the projected general operating fund balance of $5.7 million. The shortfall is expected to rise to $17.2 million in 2012, $20.9 million in 2013 and $24.1 million in 2014.
“Fiscal year ’10 is going to be a very formative year for the city,” said Delong.
Commissioners also adopted a property-tax millage rate of 8.3709 mills last week, up by .13 mills from this year. The increase is in the refuse millage.
City CFO Scott Buhrer said the average taxable value of a home in Grand Rapids is about $60,000. The higher millage rate means the owner of a $60,000 home will pay an additional $7.80 in property tax this year. The 2009 tax bills go out Wednesday.