State aid helps fund various city services, including police, firefighters, road maintenance and garbage collection.

More than $5 million in state aid for East Lansing has been cut since 2001.

East Lansing City Manager Ted Staton said the funding decline has been a significant burden given the state’s poor economic conditions.

“The growth in property taxes has slowed,” Staton said. “The general economic conditions have slowed new construction, both for commercial and housing.”

With less money, the city has had to stretch resources, sometimes forgoing street maintenance, East Lansing City Councilmember Kevin Beard said.

“What the city has had to do over the past six or so years is tighten our belt,” Beard said.

“We’ve had freezes in staff hiring and some streets haven’t been able to be repaved. You patch the roads but you can’t repave as much as you would like.”

Since 2002, the state Legislature has cut $3 billion in state aid for cities, said Dan Gilmartin, executive director of the Michigan Municipal League.

“When the state has gone through its own budget dilemma in the last decade or so, they’ve seen (city funding) as a spot to raid,” Gilmartin said.

For Lansing, which has seen state aid decline by a total of $15 million in the past three years, snow plowing and park maintenance have been reduced, Lansing Mayor Virg Bernero said.

Because of the state’s struggling economy, it has had to dip into city revenue sharing funds for state services such as Medicaid and prisons, said Craig Thiel, senior research associate for the Citizens Research Council of Michigan, a nonpartisan public affairs research group.

“The big drain has been health care for the elderly and the poor and corrections have been growing,” Thiel said.

The state spends about $2 billion a year on the corrections department, an increase of about $400 million since 2001, Thiel said.

Granholm’s proposed 4 percent increase depends on the results of budget negotiations for the state’s 2009 fiscal year, which begins in October, Thiel said.