Faltering state economy worries public workers

Jeff Broddle | Cadillac News Karen Rotman dishes out some soup at the Osceola Commission on Aging meal site in Reed City. Transportation of meals to people who are homebound may be cut in the face of a tight state budget.

Belts have been tightened to the last notch and the fat is trimmed. Administrators for government-supported agencies and municipalities wait with apprehension to learn how state legislators will deal with what some are calling Michigan's worst financial crisis and whether more funding cuts are looming in 2007.

From senior meals to patching roads, those responsible for managing the area's public services are struggling to stay afloat through the uncertainty of Michigan's economic downturn.

“Osceola County is not in bad shape compared to other counties,” said Commissioner Dave Brooks. “But I think we're kidding ourselves if we think we won't have to consider maybe looking at cutting services.”

Jack McHugh, legislative analyst for the Mackinac Center for Public Policy, a free market think tank, believes it's time to build a new vision for progress.

Six hundred seniors depend on Loraine McCall and the Osceola County Commission on Aging staff for meals, medical transportation and other necessities.

For now, COA administered program funding appears secure. However, with the state in financial crisis, McCall wonders what's around the corner for her charges.

Earlier in December, Gov. Jennifer Granholm said, based on preliminary estimates for the current fiscal and upcoming year, more cutbacks could be on the horizon as Michigan copes with a potential $3 billion budget hole over the next two years.

COA's funding is tied to contracts already in place, giving the budget some level of stability. But pennies have been pinched, staff hours cut and services prioritized to preserve senior programming.

“As far as state and federal grants, they are pretty much the same as last year, which still equals a cut because costs have gone up,” McCall said.

The fate of COA millage supported services is her greater concern. Osceola County has experienced the loss of hundreds of manufacturing jobs during the last decade and the tax revenues they generated.

“We have such a little amount of industry in this county,” she said. “If anything goes, it gets scary.”

Hard times in Michigan pressure agencies across the board. Officials at Community Health Department District No. 10 are keeping a nervous eye on how state legislators approach deficits in 2007.

“We are one-quarter of the way through the (fiscal) budget. At this point, things are under control,” said Linda Gills, health officer. “The question is whether there will be an executive order affecting our state funding.”

Programs potentially impacted by state cuts include immunizations, hearing and vision, sexually transmitted disease control, communicable disease, restaurant inspections, water protection and septic/sewage.

The district is not considering layoffs or other cost-cutting measures. “It is dependent on what happens at the state (level),” Gills said.

The Wexford County Road Commission coped with a $100,000 revenue reduction during the past year without initiating layoffs or service cuts. Services are expected to be maintained in the short-term.

Manager Alan Cooper reports commission funding is split between the Michigan Transportation Fund and gas tax. A decline in travel last summer due to high prices at the pump caused gas tax funding to fall about 5 percent, he said.

“There hasn't been a gas tax increase since 1997 and we have no way to raise our revenues,” Cooper said.

The department prepared for the lean stretch.

“We've been looking at this for the past few years,” he said. “The last four people who have retired haven't been replaced and we cut our health care costs.”

Trimming health insurance programs is a key step for government-supported organizations, said Jack McHugh, legislative analyst for the Mackinac Center for Public Policy, a free market think tank.

“They need to do what private business does when faced with similar challenges, which is to get creative about how to make themselves more efficient,” he said. “They should look at defined benefit systems, such as 401Ks for employees, at employee health care benefits comparable to private sector, rather than the more generous public sector, and look at things that are not essential - non-core services such as recreation and cultural issues.”

If locals and state leaders are up to the task, Michigan can prevail, according to McHugh.

“Michigan has great potential,” he said. “But it requires leadership with the courage to say no to government spending lobbies for us to achieve our potential.”

Your local connection

State issues:

€ Deteriorating economy resulting from declining revenues and increased spending pressures

€ Depleted reserves

€ Workforce reductions

€ Reduced taxes

€ Reduced spending in most areas of the budget

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