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Will county lose more state funds?

February 1, 2011
By Dionna Harris

ESCANABA - As most cities and townships work to deal with about a 20 percent reduction in revenue sharing from the state, Delta County hasn't heard whether state funds for counties will be reduced or discontinued.

According to Delta County Administrator Nora Viau, the county is still awaiting its revenue sharing payment from the state for December.

"We are still awaiting a payment of approximately $81,176 which was due from the state in December, and we still don't know if we will receive the estimated $122,414 for February," said Viau.

Article Photos

Graphic by Mary Ann Heath

She said while city and township revenue funding is statutory, it is considered discretionary for counties.

"We haven't heard whether revenue sharing with the state will be discontinued or reduced," said Viau.

She added that should the state discontinue revenue sharing with the counties, Delta County will be reviewing its present budget looking at where cuts could be made.

If cuts to the budget are necessary as a result of the loss of revenue sharing funds, layoffs of county employees could be enacted to help balance the budget.Currently under the State Revenue Sharing Act, all 83 counties in Michigan receive revenue generated by the state sales tax. Under the Act, payments are apportioned on a per capita basis, with disbursements made every February, April, June, August, October and December.

Although each county receives a portion of the funds generated by the state sales tax, each county is required to deposit the allocation into a Revenue Sharing Reserve Fund.In 2004, the county received a revenue sharing payment of $684,997. Spending amounts are calculated by the state using the Consumer Price Index to determine inflation.

Once the amounts deposited have been adjusted for inflation, the county is then allowed to spend a pre-determined amount set by the state each fiscal year.

Currently, Delta County has $163,651.75 in its Revenue Sharing Reserve Fund.

The reserve fund was instituted in 2004, with an initial state revenue sharing amount of $682,997. Due to modest adjustments for inflation, over the last seven years the yearly amount has continued to grow, as wells as interest. Currently, the county has accrued approximately $170,000 in interest. The state is projected to pay the county a total of $652,422.25 in the next few months, bringing the total amount for Delta County up to $816,094 in revenue sharing for fiscal year 2011.

"While the state has said it has projected a total payment to Delta County of $652,442.25 for the current fiscal year, we haven't received anything as of yet," said Viau.

She said with the current deficit faced by the state, there is no guarantee any of the projected funds will be received or if revenue sharing will be continued in the future.



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