THE NEW GILDED AGE (Part 2)
THE NEW GILDED AGE (Part 2)
Posted In: Politics, Local, Finance, Taxes, From Issue 887 By: Robert E Martin
31st October, 2019 0
On September 17th of this year Saginaw County Commissioners voted to approve a new operating budget for the 2019-20 fiscal year in the amount of $44,050,603, which represented a $2,334,194 increase over last year’s budget of $41,716,409.
This 5.59% increase over the expanse of the next year comes on the heels of three millage proposals approved by only 30.22% of registered voters in 2018 for non-mandated services, which increased the amount of property taxes paid by the owners & renters of 89,000 parcels of property in Saginaw County by approximately $3,454,616.
This latest budgetary vote received very little press coverage in the local media and no critical analysis; and seeing as a new menu of millage proposals were also approved by Commissioners for placement on the 2020 August primary ballot, it seems prudent to examine this latest round of spending increases in the 2019-20 budget with a more detailed assessment.
Along with the approval of this latest budget, Commissioners agreed to compensate this increase by drawing $2,334,194 shortfall from the county’s General Fund, which will bring what Is called the ‘Rainy Day’ fund down to approximately $18 million dollars, which will make it significantly closer to the $15 million statutory minimum required by the State of Michigan for budget stabilization for use when unexpected deficits arise.
Back in April of this year the Saginaw County Budget Audit Committee was presented six options by Saginaw County Controller Robert Belleman to reduce the budget by 2.3% across all departments, which would result in a $1.3 million savings. However, rather than make any of these suggested cuts, the majority of Commissioners voted to simply once again borrow against the general fund to cover these increases, rather than making any of the suggested cuts.
One of the options discussed at this Budget Audit Committee meeting was having the health insurance plan for all District & Circuit Court Judicial officers moved from the County of Saginaw to the State of Michigan, which purportedly would save the taxpayers approximately $200,000 per year.
Due to adamant opposition from the county judicial branch this move was tabled after Belleman purportedly received letters from Judges Janet Boes and Andre Borello asserting that they were county as opposed to state employees and any move by the county to change this status would be met with legal challenges. However, according to other commissioners, given the fact that Belleman has two legal opinions on whether judges are or are not employees of the state, it begs the question why would he suggest a change to state insurance in the first place if indeed he didn’t believe they were state employees ?
According to a recent report from the Mackinac Center of Public Policy, the average compensation of district and circuit court judges in Michigan is $166,656 per year; however how much the County would save by shifting this insurance liability over to the State of Michigan is not known.
The Review attempted several times to contact Belleman to discuss this and other issues raised in this article, however he did not respond in time for our press deadline.
Commissioner Kathy Dwan presented an initiatory motion to reveal to the public the legal opinions establishing the case for whether the judges are state or county employees and while this motion received support from commissioners Kyle Harris and Kirk Kilpatrick, the remaining commissioners voted against transparency. “Apparently these legal opinions are protected by the attorney/client privilege, with the county being the client, so these opinions are not being allowed release for public consumption”, stated Dwan.
Other items up for consideration to eliminate the subsequently amended $1.4 million general fund deficit include the following:
• Health Services. Presently $1,839,090 is taken out of the General fund to contribute to the total $11,240,006 annual operating budget for Health Services in Saginaw County. A chunk of this money is dedicated to providing professional psychiatric services to the Saginaw County Jail; however, it appears that the Saginaw County Mental Health Department is presently outsourcing these services to an independent contractor at additional expense to taxpayers. Clarification on this issue was also requested in an e-mail to County Controller Belleman, but the Review has not received a response.
• Special Assistant Prosecutor. The State of Michigan has funded a $115,108 position of Assistant Prosecuting Attorney through a grant that has ended. The Commission approved amending the General Fund budget by reinstating this position.
• Internet Technology Upgrade. The County has been operating on an antiquated software and IT system, so a bond was approved to upgrade this service. However, after the initial bond was voted upon it was revealed these services would require an additional $600,000 to cover the bond payments. As one commissioner stated: “Why wasn’t this information given to us before we voted on the initial bond payment?”
Additionally, on the March, 2020 Ballot three new millage asks will be advanced for voter’s approval. The Dow Event Center is asking to double their current millage from $1.2 to $2.4 million; MSU Extension is asking for a new millage of $450,000 per year for 10 years; and Parks & Recreation are asking for a millage renewal, but no increase.
“We had cuts to make and could have made some,” stated another commissioner who requested not be identified. The MSU Extension Service receives $200,000 per year from the County and we also provide them office space and this is a non-mandated service, as is the $200,000 we give each year to Saginaw Future.“
“As it turned out, no cuts were made because the political pressure got to everyone,” Now we’re paying for it all through our savings account. We supply many non-mandated services that we could have cut, but when does government ever make cuts?”
Our political establishment is aggressive and does not like to say no to increasing the government footprint. It is easier for them to increase taxes and budgets than to make hard decisions and to prioritize essential services over other desirable, but optional services.
The argument for collective spending through higher taxes is economy of scale and fair distribution of common benefits. However, this argument forgets that taxpayers cannot afford to pay unlimited taxes for unlimited “benefits” that many do not see as affordable or even sensible. There are limits to everything, and the scope of government is no exception.
Contrary-wise, the average tax payor has neither the time nor the money to fight over tax hikes every day in the way the tax eaters can and do. One tax hike at a time, individuals find it is cheaper and less trouble just to pay the tax than spend money to fight it. This dynamic explains how government taxing and spending gradually increase over time, in small increments that can each be explained as minor and compared to a cup of coffee, when in reality that is far from the case given the number of home foreclosures and businesses that have a rough time surviving in such a climate.
Lastly, the budget audit and the full board has approved a schedule of meetings to occur with department heads over the next couple of months asking them to come to the meetings with real numbers of where they can cut their budgets.
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THE NEW GILDED AGE (Part 2)