East Lansing could be in line for more than $100,000 in state funding under a new proposal by Michigan legislators.
If that plan materializes, Deputy City Manager Jean Golden said the money would likely be used to fill some of East Lansing's "critical needs," such as hiring new police officers and firefighters.
The money would come from a boost in Michigan's revenue sharing — which collects sales taxes from around the state and then redistributes a percentage of those revenues to local governments.
The funds can make up 25 to 30 percent of a city's budget and have been cut dramatically in recent years, according to Summer Minnick, director of state affairs for the Michigan Municipal League.
East Lansing officials are expecting to receive $5.78 million in revenue-sharing funds for the 2007 fiscal year, almost 17 percent of the city's $34.6 million operating budget. That amount is down from more than $7 million in 2001 — an 18 percent drop.
Three Republicans in the state House of Representatives have proposed pushing an additional $20 million into the revenue-sharing program, a roughly two percent increase on the $1.1 billion allocated under Gov. Jennifer Granholm's proposed budget.
Rep. Lee Gonzales, D-Flint Township, questioned the state's ability to raise payments while Republicans push to cut the Single Business Tax, or SBT, an important source of state revenue. Gonzales is the minority vice chair of the House subcommittee on general government appropriations.
"There are no additional revenues," Gonzales said. "Where are the resources in order to provide an increase?
"There's a lot more detail that we need to hear."
But Rep. Rick Baxter, R-Concord, said House Republicans don't intend to cut the SBT immediately or entirely, and revenue sharing can be boosted through some restructuring of the budget.
"Basically, we moved revenue sharing up the list of priorities," said Baxter, one of the Republicans supporting the proposed increase.
For East Lansing, a 2 percent increase would mean about $115,000 in additional funds.
The money could be placed into the city's depleted reserve fund, Golden said, but she guessed it is more likely City Council would use any additional funds to address one of several pressing needs.
Golden said decreases in revenue-sharing payments have forced the city to leave positions vacant when staff members leave — the police and fire departments are both understaffed — and halt infrastructure repairs.
"Our sidewalks are falling apart, our buildings are not being properly maintained, our roofs are leaking," she said. "We've been bare bones for a number of years."
Granholm's budget holds revenue-sharing dollars flat, but since sales tax revenues are projected to increase, Minnick views the proposal as a $600 million cut.
"The fact of the matter is, our costs are not held constant," Minnick said.
In the last five years, the revenue-sharing program has been underfunded by a total of $1.5 billion, she said.
East Lansing officials aren't counting on an increase as City Council begins finalizing the budget.
Even Baxter admitted his proposed increase has "a long road" ahead of it.
The proposal is expected to be introduced on the House floor when the Legislature returns from a two-week break after Easter and referred to the House Appropriations Committee.
