Washtenaw County administrator Bob Guenzel has done about as much as he can do. He has presented and updated the county’s projected 2010-2011 deficit over and over the last six months – best case scenario, worst case scenario, and everything in between. So what are the options? There are few.
The option of increasing future revenues is like trying to change the tire on an 18-wheeler that is still moving – downhill. It isn’t going to happen. Hoping to get voter approval to increase the county millage rate by 1 mill (back to the maximum 5.5 mills authorized in 1964, but which has been gradually rolled back thanks to the 1978 Headlee Amendment) likely cannot be achieved, given the current economic climate.
At any rate, millage reapportionment makes sense only if you could consolidate many of the functions of county and township government. But consolidation would put loveable Ebby Betts, the township treasurer for 40 years, out of a job. (Yes, Ebby is a hypothetical creature, but nearly every township has one.) Consolidation makes good business sense, which is why it will not happen. Year after year, proposed state legislation to modify township government dies in committee. Township dues paid to the self-serving Michigan Township Association to lobby the legislature protect these 200-year-old antiquated fiefdoms. Besides, everybody feels comfortable with Ebby.
With most of the county income coming from declining property taxes and dwindling state revenues, the commissioners need not spend much more time on the revenue side of the budget. The other revenue sources – fees, investment income (which in the tank), etc. – don’t amount to a mouse pelt big enough to nail on the wall.
The Ann Arbor Chronicle has provided exhaustive reporting on the county’s budget crisis. The reporting is so extensive that it numbs the mind with endless alternatives. Trying to sell a few buildings that likely have no buyers, or expecting interest rates to zoom up so the CDs will yield 3% instead of 2% isn’t going to beat off the alligator closest to the boat. Cutting expenses is the only viable option.
Now about the boat. Unfortunately – or fortunately, depending upon your perspective – the county commissioners and the staff are bunked up in steerage, one deck above the engine room and next to the pounding of the bilge pumps. How did they get there?
The gist of it is this. The county’s annual budget is about $105 million – not even a rounding error for AIG, the Wall Street scoundrels primarily responsible for this global economic meltdown. About 80% of the county budget is for wages and benefits. Of the 1,350 county employees, about 1,000 are unionized.
The union leadership is on the poop deck of this boat and will be giving directions to their helmsman on the bridge. The outside hull on this ship has a $30 million hole in it – that’s the projected deficit. Which course will they decide to take? Accept contract concessions for 2010 or gut the crew? Will the union leadership agree to reasonable wage and benefit adjustments so their members can continue to provide Washtenaw County with services that are desperately needed in this economic storm? Or will they decide that seniority is “all about us leader guys” and throw their younger shipmates over the side?
Their decision will determine what actions the county is forced to take. Personnel cuts will likely eliminate critical services needed by people who are already shortchanged emotionally and economically by this recession.
Once the course is set, there is no turning back.
[Editor's note: County administrator Bob Guenzel is expected to make budget recommendations to the county board of commissioners at their Sept. 16, 2009 meeting. He has said that the extent of cuts to services and jobs will depend in large part on whether unions representing county workers agree to negotiated wage and benefit cuts.]
About the writer: Del Dunbar, a CPA and partner with Dunbar & Martel, has lived in Ann Arbor since the 1960s.