The city of Kalamazoo has a public hearing scheduled for Monday December 17th regarding the budget for fiscal year 2013. The city’s schedule calls for the spending plan to be adopted January 7th. WMUK’s Gordon Evans spoke with Kalamazoo Mayor Bobby Hopewell.

Hopewell calls it “a holding pattern budget” because fourth quarter financial reports will tell the city how much its early retirement program has affected the bottom line. He says the city also has to adjust to the state’s recent actions to phase out the personal property tax.

Hopewell says the city budget protects public safety and essential services like sewer and water. He says there is also money for repairs of major streets and neighborhood streets.

The city is not asking its citizens for an override of the “Headlee amendment,” which limits the property tax rate in Michigan communities. But Hopewell says that could be an option in the future, but he says it needs to be part of a larger conversation with the community.

State lawmakers have approved a plan that will eventually phase out the Personal Property Tax. The tax is paid on manufacturing equipment, and is a major source of revenue for local governments. Hopewell says that would not be a major hit right away for Kalamazoo, but he says over time would add up to about $500,000. He says that would pay for five public safety officers.

Hopewell says if the state is going to require cities to provide services while cutting state shared revenue, they should remove barriers for generating additional funding. He says there is a structural problem in how cities are funded, and property tax revenue isn’t enough to pay all of the city’s bills. Hopewell says removing barriers could include allowing local governments to collect additional sales tax revenue.

The city says it’s budget is in balance this year because of the money saved through the early retirement program. Hopewell says there probably isn’t another one-time fix that could save that much money unless they were to eliminate an entire department. But he says the city must continue looking for additional savings.