Facing pressure to boost the police force and avoid further cuts in city services, Indianapolis leaders head into the next budget season with open minds about a tax increase.
That demonstrates how much has changed in city finances since 2007, when Republican Mayor Greg Ballard—an outsider, anti-tax candidate—tapped voters’ outrage over spiking property taxes to upset Democratic Mayor Bart Peterson.
Peterson also pushed through an income-tax hike for public safety, but total income-tax revenue has dropped, and the cry for more police officers is as loud as ever.
“It’s like it never happened,” Ballard’s chief of staff, Ryan Vaughn, said of the 2007 public-safety tax.
The total tax base declined with the 2008 recession, and the state, which collects and redistributes local income taxes, has withheld money to make up for previous over-distributions, City Controller Jason Dudich said.
Marion County’s total income-tax revenue has declined from $297 million in 2008 to $273 million this year.
With property-tax revenue held down by constitutionally required caps and the recent income-tax trend, Dudich estimates the gap between revenue and expenses for 2014 will be $55 million.
Ballard, who will present his budget to the City-County Council on Aug. 19, could wait for the income-tax stream, which lags state collections by at least 18 months, to turn upward and spend reserves in the meantime. The city has an $80 million fiscal-stability fund, created from the sale of the wastewater utility to Citizens Energy Group, but Dudich said he would not recommend tapping it because it helps ensure the city’s AAA credit rating.
Ballard wasn’t available to comment, but Vaughn said an income-tax hike isn’t off the table.
“It’s like it never happened,” Ballard’s chief of staff, Ryan Vaughn, said of the 2007 public-safety tax.
The total tax base declined with the 2008 recession, and the state, which collects and redistributes local income taxes, has withheld money to make up for previous over-distributions, City Controller Jason Dudich said.
Marion County’s total income-tax revenue has declined from $297 million in 2008 to $273 million this year.
With property-tax revenue held down by constitutionally required caps and the recent income-tax trend, Dudich estimates the gap between revenue and expenses for 2014 will be $55 million.
Ballard, who will present his budget to the City-County Council on Aug. 19, could wait for the income-tax stream, which lags state collections by at least 18 months, to turn upward and spend reserves in the meantime. The city has an $80 million fiscal-stability fund, created from the sale of the wastewater utility to Citizens Energy Group, but Dudich said he would not recommend tapping it because it helps ensure the city’s AAA credit rating.
Ballard wasn’t available to comment, but Vaughn said an income-tax hike isn’t off the table.
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