‘We used to get a portion of income tax, we used to get a portion of single business tax, we got an inventory reimbursement and they got rid of all of those and put it all on sales tax, with the promise that the world would be good.’
— Dearborn Finance Director Jim O’Connor
By J. PATRICK PEPPER
DEARBORN — State legislators still had not reached a consensus on a plan to cut $1.2 billion from Michigan’s 2010 budget as of press time, but were expected to work through the weekend to try to come up with a solution to avoid a government shutdown Oct. 1.
The most current projected cuts featured several measures that would be pushed onto the backs of already struggling local communities and school districts.
A 20 percent cut in state revenue sharing funds would result in about $500,000 and $275,000 less than last year’s funding levels for Dearborn and Dearborn Heights, respectively. Revenue sharing funds are generated through sales taxes.
The cuts are indicative of a trend that has left municipalities with an increasingly smaller share of the state tax base, Dearborn Finance Director Jim O’Connor said.
“We deal with less state shared revenue year after year, and it’s a serious problem,” he said. “We used to get a portion of income tax, we used to get a portion of single business tax, we got an inventory reimbursement and they got rid of all of those and put it all on sales tax, with the promise that the world would be good.
“(Legislators) have been playing with it ever since, and we’ve been suffering the consequences.”
Dearborn Heights Treasurer John Riley called the cuts “devastating.”
“Our budget’s stretched and it’s tight,” he said. “It’s kind of like a rubber band: After a while it’s going to snap if you keep stretching it.” The potential $275,000 cut is “significant,” he added.
School districts in the two communities also could see drastic reductions in funding to the tune of $218 per pupil – roughly double the figure Dearborn Public Schools officials had projected when they were formulating the district’s budget earlier this year. Although federal stimulus money is being used to offset some school cuts, there will be a day of reckoning when the stimulus funds are gone.
“It is very likely that the 2010-11 school year will be hit with a big reduction in per-student funding, possibly as much as $500 per student,” DPS Supt. Brian Whiston said in a letter sent to district staff earlier this week.