Townships, cities gird for cuts in state funds
10/7/2009TEMPERANCE - Under the cloud of a proposal that would cut revenue sharing with local governments, cities and townships were girding themselves for the worst outcome in the state budget battle.
Bedford Township Supervisor Walt Wilburn said he hoped that cuts to local governments would be minimal.
"We are just bracing ourselves. I am going to prepare for the worst and hope for the best," Mr. Wilburn said. "We are looking at the budget and studying our options in case [legislators] do something to cut us."
Lawmakers, who last week were working to address a $2.8 billion budget shortfall, were seriously considering cutting revenue sharing, a portion of sales taxes given to cities and townships.
The new state budget for the 2009-2010 fiscal year was supposed to be in place by Oct. 1, but the state and house reached agreement on a one-month budget extension two hours after the deadline.
A proposal backed by the Republican-controlled senate called for reducing revenue sharing to townships and cities by 11 percent .
The state is using federal stimulus money to erase nearly half of the projected budget shortfall, leaving lawmakers and the governor to agree on at least $1.2 billion in spending cuts.
Mr. Wilburn said he and two trustees who compose the board's budget review committee would develop a lists of options to deal with state cuts.
Recommendations from the committee lead to personnel reductions in April that equated to 6.5 layoffs for an immediate $150,000 savings to offset a projected deficit. The township also eliminated the $30,000 cost of mosquito spraying.
Mr. Wilburn said the proposed 11 percent in additional cuts would equate to about $200,000.
"We had those cuts in the spring. What we are going to look at next? I don't know," he said, adding that the additional layoffs couldn't be ruled out.
Mr. Wilburn said the township would make changes that would have the least impact on residential services, including police protection.
"Protecting the community is very important," he said.
Monroe Mayor Mark Worrell said he was taking a wait-and-see attitude on how lawmakers and the governor with hash out the budget. The city has had its revenue sharing reduced by about $800,000 in the last five years.
"I don't know what is going to happen. I don't think anyone knows what will happen until they get this thing completed," Mayor Worrell said.
So far, Monroe has averted layoffs, and instead has relied heavily on downsizing government through attrition and employee buyouts.
Two years ago the payroll was about 242 employees. There are now about 180 workers,
The city also has been hit with the declining real estate tax revenue. Mayor Worrell said residential real estates dropped about $350,000 and the city lost about $425,000 because of the closure of the Automotive Component Holdings plant.
"The good news is that in the city we have been proactively trying to anticipate this," he said. "We have faced up to fiscal issues. We are trying to have a long term prospective."
Erie Township Treasurer Cindy Baum said the township board planned for a 15 percent reduction in state revenue sharing in the budget that was approved for the fiscal year that began July 1.
"Hopefully it will work out," she said. "We cut in every department. We froze wages."