State's local governments seek budget options

By Tim Martin

Associated Press

LANSING (AP) -- Cash-strapped local governments in Michigan need more options to raise and save money as they try to balance their budgets, an organization representing cities, villages and townships across the state said Wednesday.

Michigan Municipal League representatives said the state should grant local communities more authority to ask voters for local or regional-based taxes to support economic development and provide services. Local government officials also want changes to state law they say would make it less costly and more efficient for cities and townships to consolidate services.

The proposals come as local governments have lost money in the state's tax revenue sharing system because of ongoing budget problems. Overall payments from the state, now roughly $1 billion a year, have fallen by about a third in the past decade.

The lost revenue has contributed to layoffs of police officers and firefighters and cuts in other services in cities, townships and counties. Local government officials worry more funding reductions may be proposed this year as Gov. Rick Snyder and the state Legislature try to balance the state government budget, which has a projected deficit of about $1.8 billion for the fiscal year starting in October.

Snyder, in his first month on the job, has challenged local government officials to help come up with ways to save money and improve services. He's considering ideas to give local governments financial rewards for sharing services and other innovative approaches, which would be a change in the state's revenue sharing model based largely on population.

The Michigan Municipal League is proposing several changes in part because of declines in revenue sharing payments. The group points out local communities gave up some of their taxing options years ago based on revenue sharing promises the state hasn't been fulfilling.

The municipal group also wants changes in the arbitration system related to contracts with unions representing public safety employees. Local governments want their ability to pay to be the top issue for arbitrators making decisions on contracts.

The group called for changes to state law that it says now provide disincentives to consolidations. Those include provisions that tend to protect compensation levels for public employees in groups that are being consolidated.

The municipal league wants to switch tax collections to once a year, a move it says could save local governments about $60 million annually. Local governments also want the option to hire prisoner work crews for certain jobs, rather than having to pay other employees higher rates.

Dan Gilmartin, executive director of the Michigan Municipal League, said the proposals could "put us in a better position to make sure local communities are able to do the very best work and provide the highest level of service we can, given this very difficult environment."

Published: Fri, Jan 28, 2011