By Kambui Moore
Entirely East Lansing staff writer
After the finalizing of East Lansing’s budget for the next year, citizens will have to take the good with the bad.
According to East Lansing’s annual “Fiscal Challenges” report, local government’s ability to collect taxes has been significantly hindered or obsolete for the past 70 years. In exchange for redirecting these funds, the State of Michigan promised to re-distribute to communities for essential services.
According to the report, since 2001, the State has withheld 12.8 million in revenue sharing from East Lansing. They expect that total to continue rising although they didn’t specifiy why this money is being held.
This public act funding, or 289, can prevent certain safety measures that are essential to the East Lansing community. An example of that is money used to fight fires. The cost of fire response and prevention is fully borne by the city because state owned properties are exempt from the type of taxes that would normally fund the protection.
According to the report, health care in East Lansing is becoming more costly, right alongside the national trend of rising health care costs. This lack of promised funding makes it hard for the city to manage health care for its retiring and elderly. Under the regulations of the Other Post Employment Benefits program, or OPEB, the City is required to account for and expected to pre-fund a portion of these retiree health care costs. The cost of this coverage is $40.6 million. The State’s contribution for this particular service over the last two years—$1.7 million. Governor Snyder’s way of controlling revenue sharing was to set-up the Economic Vitality Incentive Program, or EVIP. This requires certain criteria that city’s must meet to receive their funds.
The criteria appears as:
1. Accountability and Transparency that requires communities to create a performance dashboard as well as a citizen’s guide to the budget including information about unfunded liabilities.
2. Consolidation/sharing of services.
3. Address employee compensation by placing new hires on a defined contribution or hybrid plan, reducing pension multipliers,addressing the calculation of final average compensation and placing new hires on a 80/20 employer/employee healthcare premium contribution
The council has been efficiently preparing for life without the monetary help. The city manager’s report says that the council has been planning for long-term financial health and had to cut back on a lot of normal activities. Administrative positions in the city have shrunk by 15 percent since 2004 and retiree healthcare has been cut for the most part. East Lansing is aggressively pursuing these State funds while continuing to work at containing the extra costs. Consolidation of buildings and forces like the Police Dispatch Center gives the city and its neighbors a chance to lean on each other.