Leelanau County Operations Millage: More Myths

Myth Three: "The county has plenty of money. They just need to draw upon some of those big funds they're sitting on." People who talk like this are usually reading between the lines of an Enterprise article, finding evidence of hidden treasure. Recently I was shown this August 31 Enterprise article. Andy pointed to this passage:

The three major funds in Leelanau County are the General Fund, which is used mostly to fund operations, Capital Projects (building) Fund, and the Unpledged Delinquent Tax Fund, according to figures provided by Leelanau County treasurer Vicky Kilway.

Kilway is in charge of the tax fund, which is used to reimburse local governments when property owners don’t pay their taxes. Through interest and penalties, the fund has grown to more than $6.3 million, and more than any other source will pay for the $10 million county courthouse building. Some $4 million of the fund has been earmarked for the courthouse.

"See?" he said. "They still have 2.3 million dollars in the Delinquent Tax Fund, they can use that to balance the budget."

Actually, no. I had a chance to chat with Vicki Kilway, our county treasurer, yesterday.

"We could empty out the Delinquent Tax Fund," she explained. "But then, next spring when we had delinquent taxes, we would have to borrow money to cover our responsibilities. We would be paying interest on that loan instead of earning interest in the money we keep in reserve." Vicki explained that delinquent taxes typically run about $2.2 million a year. Suddenly that $2.3 million in reserve doesn't look like a whole lot of money.

Another frequently mentioned fund is the $1 million Budget Stabilization Fund. It sounds like just the thing to correct a budget deficit. But state law dictates that the Budget Stabilization fund can only be used at the end of a budget year, to compensate for expenses that came in over budget. (For Leelanau, this would typically be for snow removal in a 1978-caliber year, or some other disaster.) The state also dictates that only 1/3 of the fund may be used in a single year.