For nearly a year, the city of Fort Wayne has been wrestling with its looming budget crunch. But now, it’s crunch time: City Council members are set to vote on how to solve the problem by July 2.
Two of the ideas, a new property tax and raising the county income tax, require legal public hearings, which begin Tuesday. Don’t want your income taxes to go up? This is your chance to speak out. Think higher taxes are worth the investment in the community? You can be heard.
But municipal budgets have never been simple, and this situation is more complicated than most, because it involves everything from tax caps to an obscure taxing body to payments in lieu of taxes. How to make sense of it? How do you choose which ideas to back?
Today, The Journal Gazette attempts to explain.
Two of the ideas, a new property tax and raising the county income tax, require legal public hearings, which begin Tuesday. Don’t want your income taxes to go up? This is your chance to speak out. Think higher taxes are worth the investment in the community? You can be heard.
But municipal budgets have never been simple, and this situation is more complicated than most, because it involves everything from tax caps to an obscure taxing body to payments in lieu of taxes. How to make sense of it? How do you choose which ideas to back?
Today, The Journal Gazette attempts to explain.
What we know
Tax caps put into the state constitution have cost the city $53 million in revenue since 2009. In addition, more fuel-efficient cars and less driving because of high gas prices and the recession have made gas-tax revenues plunge in recent years – the main source for road funding. In the meantime, the cost of everything continues to rise.
State law requires a balanced city budget. So how much money does Fort Wayne need? Well, that depends.
Mayor Tom Henry’s administration says the budget is $11 million short. But that includes increasing the city’s depleted cash reserves to 7 percent, or about $9.2 million, and some say it might not need to be that high. City Councilmen Mitch Harper, R-4th, and Russ Jehl, R-2nd, contend that with bonds being paid off and by moving money around, the figure is closer to $6 million.
The bottom line: Millions of dollars are needed just to balance the budget.
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