E.L. City Council passes multiple budget cuts
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When the East Lansing City Council approved amendments to the 2009-10 fiscal year budget Tuesday at its meeting, imposing more than $1.9 million in reductions, city officials understood more difficult decisions lay ahead.
East Lansing City Manager Ted Staton said layoffs are likely for the 2010-11 fiscal year. Director of Finance Mary Haskell called such action “probable.” And while the story Tuesday might have been slashing road and capital maintenance budget and select programs, the real tale will be told as the city finalizes its budget for the 2010-11 fiscal year.
“The reason you’re talking about layoffs now is because we’ve already picked all the low hanging fruit,” Councilmember Kevin Beard said.
In all, the city voted to suspend the hazardous sidewalk repair program and reduce the major street, library, seniors program and parks and recreation funds, saving nearly $400,000 combined. The city also will delay maintenance, software and vehicle upgrades, and general services will be less frequent.
Still, East Lansing will face a $2.5 million shortfall for the 2010-11 fiscal year.
The city is preparing for the worst by not including any statutory state revenue sharing as it views the 11 percent cut to such funding from the state as indication it could be altogether abandoned.
“I really think it is going to require all of us — Council, city staff and citizens — to make sacrifices we would not have thought possible a couple years ago,” Beard said.
Considering a sizable share of the reductions is infrastructure and facility maintenance postponement, Staton said many cuts made Tuesday cannot carry into the 2010-11 fiscal year because repairs likely will be necessary.
“We’re going to have to restore some of these cuts and find other ways to reduce expenditures,” he said.
Loss of revenue sharing is a significant factor for the deficit, as it accounts for $2.4 million of the $5 million two-year shortfall. The state Legislature has cut this funding to local governments so it can balance its own budget.
“I hope shortly that the Legislature will recognize that we can’t cut our way to prosperity and that the sooner we recognize that the vitality of Michigan communities is critical to our economic recovery, the better off we’ll all be,” Councilmember Nathan Triplett said.
As a result, the city likely will have to consider using some of its $3.2 million in reserves and a millage increase for property taxes as East Lansing attempts to offset a 20 percent rise in defined benefit pension contributions and declining revenues from property taxes and revenue sharing.
Beard said he doesn’t want to see East Lansing fall victim to what could happen in Troy, where residents rejected a $1.9 million tax increase Feb. 23. As a result, city facilities could close and layoffs are likely.
East Lansing officials debated a potential half-millage property tax increase during its Feb. 6 budget brainstorm retreat, which would generate about $500,000 mostly from commercial property.
“These are uncharted territory I think for all municipalities,” Haskell said.
“How often do we see economic times like these?”
Commentary
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Skeptical City Hall Employee
(03/03/10 12:10am)Report
We are starting to see that millions of tax dollars recklessly spent on Avondale Square and City Center II are the real cause for our layoffs and furloughs. It is a fundamental overspending crisis. The services that benefit the vast majority of citizens get axed. City Hall employees get axed. But the risky, pork barrel real estate projects continue to help fill the pockets of a few developer cronies.
Skeptical Taxpayer
(03/03/10 7:15am)Report
What about money spent on “entrepreneurship” (so-called Technology Innovation Center, with no technology innovation going on, hiring staff to provide help people who want to start their own businesses who could learn everything from a class or on the internet).
hey skeptics
(03/03/10 4:25pm)Report
Avondale was funded primarily thru block grants, a federal earmark and road monies. The TIC is a project of the DDA which self funds. very little general fund money used for these projects.
Money Does Not Grow On Trees!
(03/03/10 6:19pm)Report
City Manager Staton and Mayor Loomis will say anything to get you to believe that City Center II, Avondale Square, and the East Village are FREE, and that no taxpayer money is used. They have dumped millions on these projects already, while pledging millions more with the PUBLIC BONDS. Their DDA excuse is a shill, funneling money that would otherwise go into the general fund, and instead using resources to further help their cronies. Surely, they get something in return, other than a marginally beautified downtown. All of the debt and all of the risk rests on the shoulders of the taxpayers of East Lansing, while their developer buddies get a huge bailout, without having to chip in their fair share. And NONE of the property taxes generated from CITY CENTER II go into the General Fund, so that they can say that the DDA has their own money to play with. What a joke!
Skeptical Taxpayer
(03/03/10 8:33pm)Report
With a glut on the residential property market, Avondale hurts all existing homeowners, whether or not there is external funding (all of which ultimately comes from our taxes).
I am happy to see the surrogate for the city defending the Technology Innovation Center implicitly has admitted there is nothing of that kind going on.
Ultimately, the city is going to deal with irate taxpayers who see money being spent on projects while their services are cut. Spin isn’t going to work anymore.