City May Lose $230K In Funding

Facing potential shortfalls due to a loss of revenue sharing, the City of Boyne City prepares for a likely loss in funding, and considers how to compensate

By: Benjamin J. Gohs, Associate Editor
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Boyne City’s coffers could see a nearly $234,000 reduction between state budget cuts and a drop in local property values.  Boyne City Manager Michael Cain gave Boyne City Commissioners a preview of what the city may face next budget year at its regular meeting on Tuesday, Feb. 22.

“We’re obviously evaluating what took place last week with the Governor’s budget presentation. He did call for the elimination of statutory revenue sharing,” Cain said. “ We have two components of revenue sharing: one is constitutional which is about … $220,000 a year. That’s looking to get about a 4 percent increase. The one he is proposing to eliminate … has been about $70,000 in the past.”  He added, “We’re looking at revenue sharing that will have an overall reduction of about $63,000. That’s what our estimate is right now.”

According to Cain, one of the other financial issues being discussed in Lansing is the personal property tax.  “That would lose us another $171,000,” he said. “They are talking about eliminating that.

Cain said when he didn’t see anything about the personal property tax in the governor’s budget proposal, he contacted the Michigan Municipal League.  “(They say) it’s still on the agenda, but for sometime later on down the road,” Cain said. “What that means, I’m not quite sure of. It’s not been cut yet, but I won’t be surprised if sometime later in the future it’s on the target again.”

Yet another potential cut in funding may come from the drop in home values.  “Overall, the indication is that we’ll see a 4 percent taxable value reduction,” Cain told commissioners. “We’re factoring all these components in as we’re going through our budget preparation and we’re looking to present that to you at our next meeting.”  The city operates off nearly $3 million annually.

“We’re not exactly sure on any firm numbers, but we’re trying to account for anything that will take place in the future,” he said. “We are watching our expenses very carefully and we will see where we can find more efficiencies and put out for bids and get better prices.”  Cain added, “We’re looking at all the services we deliver and make sure we minimize any impact on our customers to ensure we deliver services as we have in the past.”  Cain said several hundred thousand dollars will surely be missed.

“We realize these are challenging times,” Cain said. “We’ve been very careful with regards to our spending … and I think we are in better shape than some other communities, but this will still have some impact.”

The main concern with cutting revenue sharing, Cain said, is that the state is failing to give back money it owes to local municipalities.  “For decades there has been an arrangement made by the state which allows it to collect taxes for local units of government with the idea that it would be more efficient,” Cain said. “But, over time they forgot to return it back to local cities.”  He added, “There are lots of old ways we could levy taxes that were locally controlled but have been eliminated.”

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