Muncipalities prepare for cuts to local revenue sharing as budget talks continue in Lansing

Municipalities such as Lansing and Grand Rapids rely on state revenue sharing to fund their police and fire programs officials say. They use what is called state revenue sharing, which is a program by which the state allocated a certain percentage of tax monies to localities to help fund them, to shore up those budgets.

But Grand Rapids says more cuts to the state aid will be deadly. Greg Sundstrom, Grand Rapids city manager, sent an email to lawmakers Wednesday night indicating the city was on the edge of bankruptcy, the Grand Rapids Press reports.

“Historically, Grand Rapids has been one of the state’s jewels, but we are teetering on insolvency,” Sundstrom said in his e-mail.

“Our destiny is in your hands; please do the right thing.”

Sundstrom has since backed off the doom and gloom of that e-mail indicating that he was merely attempting to make it clear to lawmakers the severity of the crisis on the local level. The city generally brings in about $21 million in revenue sharing, but as of Thursday night, it appeared that would be hacked by $2.5 million in any budget passed in the legislature.

Meanwhile on Friday, Lansing Mayor Virgil Bernero held a press conference with his chiefs of police and fire to warn about the impact on those services if the state cuts revenue sharing. The capital city operates with about $16.1 million in state revenue sharing funds, and is looking down the barrel at a cut of $2.2 million. The city already accepted a $500,000 cut in revenue sharing earlier this year.

Randy Hannan, a spokesperson for Bernero, said cutting that kind of money out of the city’s current budget would result in painful actions.

“It could mean 30 permanent layoffs, or 30 furlough days for non-emergency employees,” Hannan said. While he says those are simply illustrations of how serious the cuts are, he said nothing is off the table and if the city faces a $2.2 million cut, some combination of cost saving measures will be implemented.

Hannan said the legislature has been “passing the buck” for years. He notes that since 2002, Lansing has foregone $30 million in revenue sharing due it under constitutional revenue sharing provisions.

Bernero himself in his press conference went a step further: “This is an unconscionable failure of leadership.”

Hannan said the city hopes that the legislature will “come to its senses,” and not make the cuts. But barring that, he said he hopes Gov. Jennifer Granholm will veto the budget and send it back to preserve revenue sharing.