GRAND RAPIDS — Members of the Kent County Finance Committee will get their second look at a draft of the 2006 general operating fund budget this week.
They took their first peek earlier this month and saw a budget worth $152.6 million, or about $10.1 million more than the current 2005 general operating fund.
Total revenue to the county next year is expected to be up by 7.1 percent from this year’s figure, but that increase is a bit deceptive.
Property-tax receipts to the county are predicted to be 11.3 percent higher for the FY06 budget from last year, going from $72.1 million in FY05 to $80.3 million in FY06. But that larger take is mostly due to the state mandate that moved a property-tax payment date from winter to summer, and not an 11 percent increase in taxable value.
That shift means the county will collect more property-tax revenue this year well in advance of the upcoming fiscal year that starts on Jan. 1, a scenario that will be repeated through 2007 when all payments will be due in the summer. State lawmakers approved the collection date change last year as a replacement for making revenue-sharing payments to counties.
But starting in 2008 the county will be receiving property taxes about eight months into the fiscal year, if “>Kent keeps the calendar year as its fiscal year. And county officials have no idea how much tax revenue they’ll be able to count on beginning in 2011 because the law that changed the tax payment dates expires then and doesn’t contain a follow-up.
“In the short term, you’re better off. In the long term, you’re worse off,” said Robert White, county fiscal services director, to committee members of the date changes.
Committee members also learned last week that total expenses for the general fund stand at $157.9 million right now, which would leave the county with a deficit of $5.3 million. That means cuts in personnel and services will be made because Kent County Administrator and Controller Daryl Delabbio said a shortfall couldn’t top $3.5 million — the maximum amount the county is willing to transfer from the fund’s balance.
“We’ve known for several years that this day was going to come,” said Commissioner Roger Morgan, board vice chairman and chairman of the Finance Committee.
The fund balance is expected to be $71.4 million at the end of this fiscal year, down by $6.22 million from the start of the year when it stood at $77.6 million. The fund balance was $98.1 million at the start of 2003, meaning the county has drawn down $26.6 million from it over the past three fiscal years.
When asked what were the priorities for the general fund, Delabbio said one was to keep the Sheriff’s Department fully staffed. But after that, he said it was hard to say because the budget process has just gotten underway.
“We’re going through that process right now,” he said of developing priorities.
But Delabbio added he has about $700,000 worth of wiggle room on the $152.6 million operating budget, meaning next year’s financial plan could rise by that amount.
Committee members learned in June they would have $2.9 million to spend on capital improvement projects next year. A panel of department heads said that roughly half that amount, $1.4 million, should go to requests made by the facilities management department.
White told the committee not to expect a big boost in property-tax revenue when many of the projects under construction are completed, as a good number of those are going up on properties that are nearly tax-exempt or tax-abated for years to come.
He pointed out there were 28 tax-capturing entities in the county, like tax-increment financing and downtown development authorities, and each one fully claims its state-sanctioned share of the property-tax revenue available in its district — and that is income not going to the county.
White also said that the taxable value in the county rose by 5.7 percent from last year, but he added that 4 percent came from the change made to property tax payment dates.