CHICAGO - The Wayne County Commission Thursday approved a $1.6 billion 2016 budget that the Michigan county's top executive called crucial to its recovery from its financial emergency.
The general fund budget totals $1.15 billion, down from $1.38 billion in fiscal 2015 and $1.46 billion fiscal 2014 budget. The projected 2017 general fund budget totals $1.16 billion.
County Executive Warren Evans said the spending plan eliminates a $52 million structural deficit that has plagued the county for years.
"It is a realistic and balanced budget that aligns with my administration's recovery plan," Evans, who took office in January, said in a statement after the board vote. "Today marks another positive step toward improving the financial health of our county."
The board approved the budget 14-0, with one member absent. The county's fiscal year begins Oct. 1.
Evans asked Gov. Rick Snyder in June to declare the county to be in a financial emergency. Snyder made the declaration on July 22, and the county now operates under a consent agreement with the state.
The new spending plan features cuts across nearly all county departments. Commissioner Diane Webb, D-Livonia, called it an "honest budget."
"This budget, as brutal as it is, is the real deal," she said during the board meeting, according to local reports.
The budget comes as the county has reportedly reached a tentative deal with unions that avoids a 5% pay cut that Evans had said was necessary. Details on the contracts are not yet available. The county and unions are in the midst of a 30-day window to negotiate new contracts. After that, the county will gain new power to impose labor terms as allowed under the consent agreement with the state.
Wayne, which carries junk-bond ratings from all three major ratings firms, has no outstanding unlimited-tax GO bonds. It has $700 million of limited-tax GO bonds and expects to have a total of $1.2 billion of tax-supported bonds by the end of fiscal 2016.
That figure is projected to decline to $927.3 million by the end of 2017.
The budget proposed that the county issue $75 million of tax anticipation notes in fiscal 2016 and $75 million in 2017.
It also proposes the issuance of $210 million of delinquent tax anticipation notes, backed by a limited-tax GO pledge, in 2016 and $200 million in 2017. The county would also float a total of $153 million of drainage district bonds backed by its LTGO pledge by the end of fiscal 2017.
Moody's Investors Service rates the county Ba3. Standard & Poor's rates it BB-plus and Fitch Ratings rates it B. All three have a negative outlook on the ratings.
