COVID-19 crisis complicates local budgeting processes

Village Hall. Photo courtesy of Carrie Keller.

While many people are staying home and staying safe during the coronavirus shutdown, members of the Village of Manchester administration staff remain at work, focusing in the coming weeks on the budget for FY 2020-21, which begins on July 1, 2020.

“We continue to work on this, but changes come daily,” said Village Manager Jeff Wallace of the process. “Staff has (been) kept busy with the updates.”

One of those updates came from a Southeastern Michigan Council of Governments (SEMCOG) webinar presented by the the University of Michigan Research Seminar in Quantitative Economics.

Village Manager Jeff Wallace

“The most recent articles indicate Michigan sales tax dropping $2.6 billion for the current fiscal year (that ends in October),” Wallace said in his manager’s report to Village Council last Monday night. “Gas tax in March is down 22.6%. Sales tax is important due to state shared revenue, and gas tax helps fund the ACT 51 money we get from the state (for road and street repairs).”

“Heads up,” he added during the Council meeting. “This (2020-21) will definitely be a slow budget year.”

Most of the village’s Statutory State Shared Revenue (which currently totals $28,000) could be lost, he warned, which would affect the budgeting process. The reduction in ACT 51 revenues could also have a huge impact on the street funds, estimating a shortfall of $10,000-20,000.

Wallace reported that Monday’s webinar with the State Treasury Department indicated that the state will do what it can to continue to support communities, but seems to hope that the Federal government will help to make things “whole.” He expressed concern that this might solve some problems but create new ones.

“As further news comes out of Lansing, we may be making budget adjustments in our first quarter next year, as opposed to most years where we only make adjustments at the 6-month and 11-month marks,” he said.

“The good news is we have experience in budgeting with these types of changes, and we will be able to handle the monetary aspect,” Wallace concluded.

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by Marsha Chartrand

Marsha Johnson Chartrand, a founder, writer, and copy editor with the Manchester Mirror, is a 50-year resident of Manchester. She has a long history of volunteer and community involvement.