Traverse City Record-Eagle

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April 5, 2014

GT County officials eye increased revenue sharing

TRAVERSE CITY — Grand Traverse County's fiscal health next year largely hinges on events outside local officials' control, the county's administrator said.

The county faces a $1 million deficit in 2015, but state lawmakers could offset a majority of that shortfall -- $700,000 -- if they pass a state budget that restores cuts to revenue-sharing payments, a portion of state income tax revenue shared with Michigan's counties and municipalities.

"It’s really important that we get the revenue sharing, or else we’re looking at cuts in the next budget season, and significant cuts," county Administrator Dave Benda said.

State officials reduced revenue sharing payments in recent years to offset statewide deficits, according to the Michigan Municipal League.

Gov. Rick Snyder proposed restoring revenue sharing totals next year, in part by providing maximum revenue-sharing funding for 74 counties, according to an executive budget recommendation released by the state.

But Benda said some legislators are trying to earmark portions of any restored revenue sharing for purposes like boosting funding for county road commissions.

"There's some folks who have found ways to tweak it," he said. "To add 'thou shalt spend it on' provisions; we're not happy about it."

Benda said he expects state officials to finalize the budget in June, roughly the same time county officials begin their own budget process.

County commissioners recently completed a county-wide review of services after board members struggled to close a 2014 budget shortfall.

Commissioner Charlie Renny, who joined the board last year, said that review taught him a lot about the county's operations, but cutting next year's budget -- if necessary -- still won't be easy. Departments heads are already doing what they can to save money, and balancing the budget while maintaining services will be difficult without finding new revenue sources.

"We've still got work ahead of us," Renny said. "Believe me."

The county could receive additional funding relief on its pension obligation payments, Benda said. The county's defined benefit fund was expected to grow by 8 percent last year, but it's actual growth was closer to 25 percent.

The fund grew by about $10 million, which could decrease the county's annual retirement fund contributions, depending on how Michigan Employee Retirement System officials amortize the county's overall pension obligations.

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