Heartwell on tax vote: "We missed that"

In the midst of trying to work through a $27 million budget shortfall for 2010, the city of Grand Rapids learned that one of their plans to fill part of that has fallen through due to an oversight by City Manager Greg Sundstrom.

The city of Grand Rapids is in financial trouble. Its more than $9 million short this year and $27.5 million short for next year. The city commission has been hard at work making cuts and changes.

The city of Grand Rapids had planned to lower the tax exemption which would have meant more money for the city. However, the city commission had planned to vote for the change on Tuesday - but that would have been three days too late.

It means $200,000 less toward fixing next year's budget disaster.

"On virtually everything that the city commission does requires a 30 day notice," said Grand Rapids Mayor George Heartwell. "This is one ordinance that would require a 45 day notice. We missed that."

The city commission was to vote to decrease the tax exemption Grand Rapids citizens have on their city taxes. Lowering it would mean more money out of the paycheck for Grand Rapids taxpayers and more money for the city. But the commission had to vote for the increase 45 days before it went into effect on January 1, 2010.

"There's nobody to blame for it. We're moving so fast here and trying to solve a problem like we haven't seen since the great depression" Heartwell said.

The exemptions are based on the city's income tax. Grand Rapids collects both income and property tax. The property tax hits property owners, but the income tax hits everyone who works in the city, regardless of where they live. So it's not just Grand Rapids residents that would have been affected by the decrease in exemptions.

The city could have called a commissioners meeting over the weekend to get the motion passed, but the mayor and Sundstrom agreed against that.

"To me that smacks of bad process. It smacks of doing things in the dark of the night to call a special city commission meeting in order to lower the personal income tax exemption didn't seem like the right thing to do.

The mayor said they can now vote on an increase for the second part of the year - that would go into place on July 1, 2010.

To put this all in perspective, $200,000 is less than 1% of the amount necessary to fill the shortfall for the coming year.

24 Hour News 8's Joe LaFurgey contributed to this report.