From the Indianapolis Star:
A City-County Council committee’s rejection tonight of a proposal to eliminate a property tax credit leaves a $9 million police funding gap next year, Mayor Greg Ballard’s top aide says.
Council Democrats, including President Maggie Lewis and Administration and Finance Committee Chairwoman Angela Mansfield, said they still were exploring alternatives that wouldn’t increase tax bills for most homeowners.
It was the council’s third rejection of Ballard’s push to ax the homestead credit. That credit diverts some income tax revenue to lower property tax bills for 75 percent of homeowners by an average of $22 a year.
Ballard’s proposed $1 billion city-county budget for next year depends on the elimination to free up $11.5 million for the Indianapolis Metropolitan Police Department. Without that move, Vaughn said, IMPD’s main budget fund would go into the red by an estimated $9 million.
Vaughn said the mid-game budget move leaves in limbo a compromise offered by Ballard: If the council would phase out the the homestead credit over two years, he would agree to borrow $7.5 million from a city stability fund to plug IMPD’s budget next year and pay for a second recruit class of 30 officers.
The committee voted 5-3 vote, along party lines, against a motion to send the proposed credit elimination to the full council.
Lewis said talks with the administration would continue but declined to comment further.
The council still could revive the credit elimination, but under state law, it must act by its Sept. 23 council meeting for the change to take effect next year. It plans to vote on the overall budget by mid-October.
Separately, the committee postponed another tax proposal to its Sept. 17 meeting. That measure would expand a special police taxing district, which currently adds an assessment to tax bills only in the old city limits, to the county line.