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Flint's budget balanced, but multimillion-dollar deficits loom

Flint’s emergency manager is delivering a balanced budget for next year, but the future may not be as bright.

The city of Flint is closing out its current fiscal year with a balanced budget. Emergency Manager Ed Kurtz says next year’s budget should be balanced as well. City officials gave state Treasury Department officials a briefing on the budget, before showing Flint’s city council the plan.

Flint city council members expressed concern that the proposed FY2014 budget is a little too tight.

Council President Scott Kincaid is concerned about budget cuts to street repair and other basic services.

Kincaid is especially worried about the lack of money to remove blighted properties. 

“Without blight enforcement, we got to do something to stabilize our community,” says Kincaid.  “It has not been their focus to focus on quality of life in neighborhoods and that’s what driving our property values down.”

A public meeting on the budget plan is scheduled for Tuesday. The plan may be adopted on Thursday.

But Ed Kurtz says declining property taxes and the loss of grant funding could leave Flint with a three-million-dollar hole in each city budget from 2015 through 2018.

“Cumulatively, if we don’t do anything other than continue … as we are in fiscal year 2014 ... we will have another 19.2-million-dollar deficit … by the end of that five-year period of time,” says Kurtz.

Flint is already struggling to reduce a deficit in its general fund. The city of Flint is still waiting on the state to approve a deficit elimination plan to reduce the 19 million dollars of red ink. 

Kurtz says bankruptcy is not a good option for Flint. He says neither is slashing city retiree health care, which is costing the city of Flint millions of dollars.   

The solution could be to raise the city’s income tax rate. Otherwise, Flint may have to undergo more deep cuts to city services, including public safety.

Steve Carmody has been a reporter for Michigan Public since 2005. Steve previously worked at public radio and television stations in Florida, Oklahoma and Kentucky, and also has extensive experience in commercial broadcasting.
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