Kentwood budget hit by Headlee rollback; commission opts out of PA 152 for FY2027

City leaders told the Kentwood City Commission that tax-rollback provisions under the Headlee amendment reduced the city’s allowable millage and cut projected revenues by an estimated $1,293,835. The mayor and staff emphasized that the rollback’s cumulative effect reduces funding available to core services, with police and fire among the most affected departments.

Staff presented a summary of the FY2027 general fund and special revenue budgets and described how millage rollback calculations work under Headlee (growth limited to the lesser of inflation or 5 percent). The mayor warned that communities hit by similar rollbacks have taken many years to recover after economic downturns, and commissioners discussed implications for services and future budgets.

Separately, staff recommended the commission adopt a resolution to opt out of Public Act 152 (the publicly funded health insurance contribution act) for the 2027 plan year. PA 152 requires local governments to either implement an 80/20 cost-sharing arrangement, keep plan costs below statutory hard caps, or opt out. Because projected health-plan costs for FY2027 exceed the PA 152 hard cap for the city’s plan, the commission approved an opt-out resolution by roll-call vote.

What happens next: opting out allows the city to continue its current health-plan cost structure for FY2027 without adopting the 80/20 split or making plan-design changes required to meet the hard cap; staff will monitor health-plan costs and return with budget recommendations as needed.

Quote: "$1,293,835 have been rolled back...the majority of that is police and fire," — Mayor (presenting budget impact).