City’s financial surplus this year is nothing to celebrate

By Charles Sercombe

In what could be called a twist of fate, Hamtramck is going to end its fiscal year with a $2 million budget surplus.

But that surplus will be short-lived.

It just so happened that with another month to go in the fiscal year, which ends June 30, Hamtramck just received $3.2 million from Detroit. That money is part of a settlement agreement with Detroit over how much tax dollars are owed from GM’s Poletown plant.

Hamtramck had been feuding with Detroit over the payment and finally reached an agreement several weeks ago.
Although city officials can breathe easier now that there is a cash reserve, there is much riding on what kind of city employee contract concessions will be agreed on – if any – and whether a number of other financial matters fall into place.

If the city receives no contract concessions, by this time next year there could be a $1 million budget deficit, said City Manager Bill Cooper.

“Everything now is a what-if,” Cooper said over whether hoped for savings come through.

Even if Hamtramck survives 2012 financially intact, Cooper said fiscal year 2013 will put the city in a “critical situation.”

Hamtramck is far from being alone in keeping the budget balanced. Gov. Rick Snyder and his fellow Republican legislators have made severe cuts in state revenue sharing to cities and public school districts.

Snyder is also demanding that communities force their public employees to agree to 20 percent co-pays to their health insurance plans.

If public employee unions – which include police officers and firefighters – refuse to make concessions and communities can’t balance their budget, the governor could appoint an emergency financial manager to take over. EFM’s have recently been given expanded powers that include allowing them to rip up existing union contracts and writing their own terms – whether union employees like it or not.

One Response to City’s financial surplus this year is nothing to celebrate

  1. Roger Lamm

    May 26, 2011 at 2:51 pm

    the additional 2500 jobs at the GM plant should net an additional $200,000 a year from income tax to the city, not much (about 1% of our budget) but its something to look forward to

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