“The reason you’re talking about layoffs now is because we’ve already picked all the low hanging fruit,” Councilmember Kevin Beard said.

In all, the city voted to suspend the hazardous sidewalk repair program and reduce the major street, library, seniors program and parks and recreation funds, saving nearly $400,000 combined. The city also will delay maintenance, software and vehicle upgrades, and general services will be less frequent.

Still, East Lansing will face a $2.5 million shortfall for the 2010-11 fiscal year.

The city is preparing for the worst by not including any statutory state revenue sharing as it views the 11 percent cut to such funding from the state as indication it could be altogether abandoned.

“I really think it is going to require all of us — Council, city staff and citizens — to make sacrifices we would not have thought possible a couple years ago,” Beard said.

Considering a sizable share of the reductions is infrastructure and facility maintenance postponement, Staton said many cuts made Tuesday cannot carry into the 2010-11 fiscal year because repairs likely will be necessary.

“We’re going to have to restore some of these cuts and find other ways to reduce expenditures,” he said.

Loss of revenue sharing is a significant factor for the deficit, as it accounts for $2.4 million of the $5 million two-year shortfall. The state Legislature has cut this funding to local governments so it can balance its own budget.

“I hope shortly that the Legislature will recognize that we can’t cut our way to prosperity and that the sooner we recognize that the vitality of Michigan communities is critical to our economic recovery, the better off we’ll all be,” Councilmember Nathan Triplett said.

As a result, the city likely will have to consider using some of its $3.2 million in reserves and a millage increase for property taxes as East Lansing attempts to offset a 20 percent rise in defined benefit pension contributions and declining revenues from property taxes and revenue sharing.

Beard said he doesn’t want to see East Lansing fall victim to what could happen in Troy, where residents rejected a $1.9 million tax increase Feb. 23. As a result, city facilities could close and layoffs are likely.
East Lansing officials debated a potential half-millage property tax increase during its Feb. 6 budget brainstorm retreat, which would generate about $500,000 mostly from commercial property.

“These are uncharted territory I think for all municipalities,” Haskell said.

“How often do we see economic times like these?”