Could it be? Less than 24 hours after the Lansing City Council adopts a budget for fiscal year 2011 — included a 10 percent pay cut for city employees because of a deficit — there’s news out of the Capitol of a bill that could put the city back into a deficit.
According to the Associated Press, a bill was passed in the Senate Tuesday afternoon that would cut the state’s revenue sharing with cities by 4 percent. The cut would go into effect Oct. 1.
It was state revenue sharing cuts that the administration of Virg Bernero said knocked the city’s budget out of line this fiscal year, necessitating a $6 million emergency mid-year deficit elimination plan (including a round of furloughs for non-emergency employees, a hiring freeze, a freeze on spending, etc.).
On Monday night, after Council passed the budget, Council members Brian Jeffries, Eric Hewitt and Carol Wood all said that they were worried the budget would go into a deficit. And Jerry Ambrose, the city finance director, and Bernero’s chief of staff, had reminded reporters that the city’s mid year deficit this year was because of the state revenue sharing cuts.
Is it time for cities to assume that state revenue sharing is no longer a reliable source of income? Can the city assume the worst, and right now prepare for a 4 percent cut in revenues come October?