Lansing — State Democratic Chairman Lon Johnson and three municipal officials Wednesday accused Gov. Rick Snyder of conducting "hostile takeovers" by using their state revenue-sharing money to cover the cost of the $1.8-billion tax cut he and lawmakers gave businesses in 2011.
The result, the Democratic officials said, is that a growing number of Michigan cities face another of "takeover" in the form of emergency managers with expanded powers. Detroit last week became the latest and biggest city to which the governor appointed a state manager because of huge accumulated budget deficits and almost $15 billion in unfunded liabilities.
Clinton Township Trustee Dean Reynolds accused Snyder of "balancing the books of the state on the backs of cities and townships."
Reynolds said the 100,000-population township, Michigan's largest, has seen its fund balance shrink to $10 million, down from $22 million in 2002, in spite of cuts that include a 20 percent to 25 percent pay reduction for its employees.
That's partly due to revenue-sharing reductions and partly the result of recessionary drops in home values and property tax revenues, he said. Since 2009, he added, the township has lost a total of $25 million in annual revenue to support government services.
"If it keeps going this way, we're going to be down to nothing," Reynolds said. "We just can't cut enough because the money is not coming in."
Snyder and legislative Republicans have noted revenue-sharing money fell because the state lost revenue during the recession. Snyder and his legislative allies cut taxes for business in hopes of making Michigan more competitive in attracting and keeping businesses as well as creating jobs.
Ithaca councilmember L.D. Hollenbeck said his city, the Gratiot County seat, is dumping its Police Department and relying on the county sheriff for law enforcement. Hollenbeck said Ithaca's state revenue-sharing has dropped to $280,000 from a one-time high of $424,000.
"We're going to lose services that people need," said Hollenbeck. "He's taking away from elected officials and putting us in a real bind."
Ann Arbor council member Chuck Warpehoski said the state also is failing to meet its obligations to fund fire protection for state universities. While Ann Arbor is OK for now, he said, more trouble is ahead with the prospective removal of personal property taxes on business equipment and factory machinery, a big revenue source for many local governments.
"He's got to bring that revenue in some way," Johnson said of Snyder.
Funding that should go to local governments, he said "is all a big pile of money and he's going for it."