A local municipality is continuing to discuss their options for addressing a noticeable deficit in their general fund.

Howell City Manager Shea Charles says budget difficulties have caused city officials to evaluate whether they need to make significant cuts or explore some type of revenue adjustment. He tells WHMI after city council adopted the 2017-2018 budget, they noted there will be structural deficits moving forward. The current fiscal year will reduce the city’s fund balance by about $500,000. Looking forward, there will be a structural deficit of approximately $300,000-400,000 a year.

Charles says the city has done well managing revenue, but a failed fiscal system and the way Michigan finances local governments isn’t translating to stronger municipal revenues, despite the noticeable economic recovery in the area. Based on the city’s general fund balance, he believes something has to give in the foreseeable future.

For some time now, city council has discussed placing a request on the ballot in May of 2018 to override the Headlee Amendment. A Headlee Override restores a municipality’s tax or millage rate to its original rate in order to generate more revenue. The city has a binary choice of either adding revenue with the override, if approved, or making more cuts. Officials say this challenge is prevalent throughout the state. The city has already made budget cuts and reduced staff according to Charles, so the next round of cuts could mean potentially eliminating services.

City Council held a session in August to review their options and will evaluate them further at a meeting September 18th. (DK)