By Charles Sercombe
It looks like Hamtramck will have to slash spending to plug a $2 million budget deficit.
A few months ago City Manager Bill Cooper thought he had a workable plan to deal with the city’s deficit. But one key part of the plan depended on Detroit officials continuing a payment sharing plan with GM’s Poletown plant, which straddles both Detroit and Hamtramck.
As it turns out, Detroit is refusing to budge from its position on a special tax agreement created when the plant was constructed in the 1980s. Detroit insists the plan expired in 2006 and that Hamtramck will no longer receive $2 million a year.
Cooper said he had hoped to convince Detroit that the tax agreement was never supposed to end.
It now looks like this dispute will head to court, but getting that resolved could take years. In the meantime, the city has to find somewhere in the budget to either increase revenues or make cuts.
Cooper said he will ask the city’s labor unions to make concessions and will force non-union members to take pay cuts. If the unions do not agree to concessions, Cooper said at least six employees will have to be laid off.
Adding to the city’s financial challenge is the increasing cost of health insurance, which Cooper said shot up by $500,000.
Cooper and the council have been holding early morning work sessions this week to iron out a new budget plan. He said a final budget should be ready by next week. The city’s fiscal year starts July 1.
State law requires each community to submit a balanced budget for each year. Ironically, the state has been unable to balance its own books for the last few years.
Despite the downturn in finances, Councilmember Catrina Stackpoole said Hamtramck’s financial outlook is better than most other cities in the metro area. Many cities are reporting hefty multi-million dollar deficits and are looking at closing their libraries and other departments and services.