State Rep Updates Berkley Officials on Budget Forecast

At Monday evening’s meeting, where routine matters of business were punctuated by a Headlee Override proposal, state Rep. Ellen Cogen Lipton (D-Huntington Woods) made an unscheduled appearance, updating members on the latest budget happenings in Lansing.

Her fortuitous attendance and reporting on the political molting taking place with next year’s state budget ultimately underscored the position city leaders now find themselves in as they embark on a task to determine the public’s amenability toward a tax hike.

“The governor delivered his executive recommendations, kicking off the budget process, which will go through probably the spring,” Cogen Lipton said. “The administration has notified the appropriation committee that he wants the budget done by May 1.”

Last year, the state Legislature presented Gov. Rick Snyder the 2012 fiscal year budget for signing in June, which he did, making it the earliest a budget had been enacted into law in three decades. Cogen Lipton said she believes the legislature will meet the May 1 deadline.

In describing the tectonic shifts in revenue allocation and redistribution that first appeared last year in the form of Snyder’s Economic Vitality Incentive Program, Cogen Lipton assuaged concerns that less money would be flowing from Lansing in 2013 than it is currently.

“We expect to see a slight increase in the amount of funding for line item appropriations,” she said, anticipating no more than a 1-2 percent increase. “We are not expecting to see a full restoration of money but no cuts have been planned [for 2013] — at least it’s in the positive direction.”

In 2011, Snyder eliminated statutory revenue sharing, which was the way local communities had previously received funding from Lansing, and created EVIP. The incentive program mandated that municipalities fulfill three core statutory requirements: demonstrate accountability and transparency, consolidate services and establish employee compensation plans limiting the municipality's retirement and pension expenses.

Each of the three requirements, when fulfilled, represents a one-third portion of money localities could receive from the state. Under the terms of EVIP, cities, villages and townships that previously received statutory payments of greater than $4,500, and fulfilled specific requirements for the three categories, were then eligible to receive a maximum of 67.8 percent of their former statutory payment.

Cogen Lipton said the two biggest changes to the 2013 budget were the implementation of EVIP requirements to county governments and that some of the most stringent “best practices” were open to greater interpretation on a case-by-case basis.

“What the administration is willing to listen to — from both sides of the aisle — is an element of flexibility,” Cogen Lipton said. “Pushback from the Legislature regarding who determines what the best practices are and why the executive branch is the best [arbiter] to determine that” will play a larger role in proving that municipalities have complied with Snyder’s criteria for funding.

Councilman Steve Baker asked Cogen Lipton to describe the tenor of the talks and the overall atmosphere in Lansing. Her response painted a picture of a Legislature that has eschewed the herd mentality seemingly at play immediately following Snyder’s inaugural budget proposal.

“What’s interesting in this budget cycle, what I’m seeing, is a little bit of pushback from the Senate,” she said. “What I saw last budget was a willingness by the legislature to jump in with both feet for the governor’s agenda with not much legislative pushback.”

Apparently searching for just how far the legislative pushback could go, Berkley Mayor Pro Tem Dan Terbrack asked Cogen Lipton to speculate whether the EVIP program would ever be mothballed. Her response was likely not what he had hoped to hear.

“From my vantage point, it’s safe to say this governor is very much in favor of what he calls performance-based budgeting,” she said. “We are seeing more of that in this budget, not less. Whether EVIP is working or not, the notion it will be done away with is less than zero.”