TRAVERSE CITY -- Most Grand Traverse County municipalities are in a position to roll with the latest financial punches from Lansing.
A Michigan legislative conference committee voted Tuesday to cut the state's tax revenue-sharing payments to local communities by 11 percent to help balance a $2.8 billion budget deficit.
Locally, the largest cut will amount to about $140,000* that otherwise would have come to Traverse City's government.
"The City of Traverse City is well-positioned based on years of being fiscally conservative to absorb that out of the fund balance," said R. Ben Bifoss, city manager.
Traverse City's current fund balance is $4.2 million, and the funding slash was expected, Bifoss said.
"They had been talking about 13 to 15 percent, so 11 percent is better than many municipalities expected," he said.
Bifoss said Traverse City typically receives about $350,000 a year in statutory state revenue-sharing and about $950,000 in constitutional state revenue-sharing. The difference is that the state Legislature can change the statutory amount, but doesn't control constitutional revenue-sharing dollars based on a percentage of the state sales tax.
No county governments in northwest Michigan anticipated any revenue-sharing in 2010, and most area townships lost statutory revenue-sharing years ago.
"They can't cut what you don't have," said East Bay Township Supervisor Glen Lile.
Blair Township is the last township in Grand Traverse County that receives statutory revenue-sharing. Pat Pahl, Blair's supervisor, said he has no idea why the township qualifies, but said it doesn't amount to much.
The township received $431,000 in revenue-sharing in the last state fiscal year. Last year, the township received $8,600 in statutory revenue-sharing, so the township could lose just under $1,000.
The villages of Fife Lake and Kingsley also receive statutory revenue-sharing. Kingsley Village Manager Adam Umbrasas said the proposed legislative action will cut about $3,000 from their budget. Umbrasas anticipates a bigger hit of about $17,000 will come from a continued poor economy, resulting in lower sales tax revenue.
"Right now, we're financially sound so we're not overly dependent on revenue-sharing and we don't have to eliminate any positions," Umbrasas said.
Because of incorrect information Traverse City officials provided to the Record-Eagle, this story originally reported the wrong amount of state revenue-sharing money the city stands to lose, based on a state budget proposal. The city could lose $140,000 under a proposal approved Tuesday by a legislative committee.
