Michigan's budget problems deal $1.16 million blow to Ann Arbor
State Rep. Rebekah Warren, D-Ann Arbor, told the City Council Monday night she's been fighting to prevent state revenue-sharing cuts in Lansing. But unfortunately, she says, her peers in the state capital see otherwise.
Warren told city officials at the start of Monday's meeting that the state budget for the fiscal year that began Oct. 1 includes an 11.1 percent cut in state revenue sharing to Ann Arbor. That translates to about $1.16 million, which will deal a heavy blow to the city's budget.
"I wish I was here with a little bit better news for all of you," Warren told council members. "I thought that this was a pretty draconian cut and there are many other cuts that we're doing right now in Lansing as we try to balance our budget that impact arts and cultural programs, that impact environmental protection, that impact our early childhood education, and really education at every level."
Warren, now in her third budget cycle in Lansing, said she voted against the bulk of those cuts.
Mayor John Hieftje said he's watched the city's statutory revenue payments from the state drop from $6 million to $2 million in recent years.
"It has been kind of a long road of steady declines, and we appreciate your standing up for us," he told Warren.
Warren handed out an information sheet at Monday's meeting that showed a history of state revenue sharing payments to Ann Arbor. For the 2009-10 fiscal year budget, total revenue sharing - including statutory and constitutional payments - has dropped from $10.5 million to $9.3 million.
"I voted against that budget when it was in front of us on the House floor and I did so certainly with the citizens of Ann Arbor in mind," Warren said.
Warren said she believes the state has the tools and ability to raise revenues to stabilize the budget. But instead, she said, it has consistently passed on its problems to local governments, universities and public schools.
"I don't think that's the way that we lead Michigan into the future," she said. "I have advocated for an overhaul of our tax system in Michigan. We have a very outdated tax system, and we're actually struggling with a general fund budget in Michigan that is way under the amount that it should be to effectively run the programs in the state."
Warren said she and others in Lansing are working to figure out long-term solutions to the state's budget woes. She points out Michigan is one of the few states that has a flat income tax, and there are ongoing talks of raising revenues with a graduated income tax.
"There are several of us, myself included, who are talking about a real overhaul of the tax system in Michigan, that we really have some sort of outdated ways that we collect taxes where, in a lot of ways, I think we're still taxing some of the things that are not the indicators of wealth that we would want to be taxing," she said. "And as many of us know, the largest growing sector of our economy is services, and in Michigan, we don't tax services at all."
Warren said proposals to raise revenues through a graduated income tax or sales tax would have to go on a statewide ballot for the voters to decide.
Warren told council members she'll continue to fight to restore lost revenue sharing dollars, but at this point there are no answers. She said the House has sent the Senate a supplemental that would restore a portion of the dollars, but the Senate has not yet taken up that legislation.
Ryan J. Stanton covers government for AnnArbor.com. Reach him at email@example.com or 734-623-2529.