Traverse City Record-Eagle

May 24, 2012

Another View: Don't raid fund to pay for firefighters

Lansing State Journal

---- — Working, as they do, directly across the street from the Michigan Capitol, one might expect that Lansing City Council members have learned a few lessons in government finance.

Sadly, it appears a majority of council learned the wrong lessons and are about to commit a foolish act of accounting gamesmanship that will undermine not just the city's finances, but those of its municipal utility as well.

Citizens of Lansing, it is time to demand responsible behavior from council members who would recklessly move money from the Board of Water & Light to pay for more police and firefighters.

Keep in mind that Mayor Virg Bernero and the BWL already agreed to increase BWL's so-called equity payment from 4 percent to 5 percent for the fiscal year that begins July 1. Bernero has budgeted some $17 million as a payment in lieu of taxes from the BWL to the city.

BWL is owned by the city, so yes, money it brings in technically belongs to the city. But BWL's income comes from ratepayers, the majority of whom are the same residents who pay city taxes. BWL has significant financial challenges of its own. Its board already OK'd 3.75 percent rate increases for electric and steam customers in October 2012, and again in October 2013, to pay for construction of a new power plant. This spring, it imposed 9 percent increases on water customers and 8 percent on steam customers to fund operations. And BWL's legacy costs — its future liability for pension and health care benefits promised to retirees — are every bit as troubling as those facing Lansing.

How could it possibly make sense for the City Council to request an additional $1.5 million from BWL to put more police and firefighters on the street — police and firefighters the city probably can't afford in subsequent years given the dire actuarial reports suggesting a $3 million increase in payments to meet future obligations of the city's pension funds?

This is the same disingenuous behavior engaged in by members of the Michigan Legislature, who solved their structural budget problems with accounting games until eventually they had no choices left but to make catastrophic cuts to things like revenue sharing.

Lansing's day of reckoning is here. Don't push the problem into the future. Don't spend money the city doesn't have. Lansing residents must demand better.

Lansing State Journal