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July 26, 2002Engler's proposal angers officials- Governor will cut money to counties and cities if ballot proposals pass; one official says 'we're being held hostage'By BILL O'BRIENRecord-Eagle staff writer TRAVERSE CITY - County and city officials in northern Michigan are shocked and angered over Gov. John Engler's decision Thursday to slash more than $800 million in state revenue sharing payments as a hedge against possible budget shortfalls should voters approve three ballot proposals. While the governor said the money may be necessary to help offset any costs associated with three ballot proposals should voters approve them, county and city officials say the loss of revenue sharing from the state could have a devastating impact. "I'm kind of speechless," said Leelanau County treasurer Vicki Kilway. "I anticipated a cut in revenue sharing next year. I didn't expect a complete elimination of revenue sharing." Leelanau County receives close to $500,000 a year in state revenue sharing, about 6 percent of its $8 million budget. "I couldn't even begin to tell you what we would do if we lost our revenue sharing," Kilway said. Grand Traverse County gets close to $1.5 million in state revenue sharing per year, about 5 percent of the county's $30 million budget. "It's not fair that we're being held hostage over the results of these three issues," said Grand Traverse County Commissioner Larry Inman, the incoming president of the Michigan Association of Counties. "We never would have believed that a governor would pull back on revenue sharing for county governments over a situation that we're not even a part of," Inman said. "This is going to have a huge impact on our budget." Engler said it was with "great reluctance" that he vetoed the $845 million in revenue sharing, but that he had to reserve funds for costs he says the state will absorb if the three petition-driven state proposals are approved by voters in November. One of the proposals would overhaul the state's drug crime sentences by requiring treatment for drug offenders. The second would commit tobacco settlement money to health care programs and the third would offer collective bargaining and binding arbitration to state employees. The ballot issues still have to be approved by the state Board of Canvassers. Engler called the proposals "budget-busting initiatives." The governor said he didn't cut revenue sharing payments to bolster opposition against the ballot proposals. But he said he thinks they would drain state coffers and take away power from the Legislature. "This is not some game here that is designed to get them in the fray," he said about local government officials. "They are sitting on the only pot of money that could be called discretionary." The state budget includes two types of revenue sharing payments. Some of the funding to cities, townships and villages are mandated by the constitution, but much of the funding is under the discretion of state lawmakers - including all of the revenue sharing that goes to county governments. Benzie County administrator Chuck Clarke said eliminating all the county's revenue sharing, which totaled more than $300,000 this year, would be "devastating." "I don't know where the cuts would come from (to offset the loss of revenue sharing)," Clarke said. "When you're talking about $300,000, you're talking about running two departments. ... It would be a major cut in services, and we're looking at the potential for that anyway (next year)." Traverse City Treasurer Bill Twietmeyer said the city was anticipating around $1.6 million in state revenue sharing funds for its $12 million general fund this year, but could lose up to half that amount under the Engler plan. "This will have a big impact on everybody," Twietmeyer said. "Revenue sharing is a significant portion of funding for all the municipalities." |
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