Saturday, February 15, 2014

News and Tribune Reports Jeffersonville Sitting on $5.2 Million Surplus

From the Clark County News and Tribune:

Talks about the city’s 2014 budget has led to some disagreements, particularly on the interpretation of the word “surplus.”

The fiscal year began with a balance of $5.2 million in Jeffersonville’s general fund, a number that was a surprise to many city council finance committee members when it was discussed at a Thursday meeting.

“It feels as if things are just flowing without communication,” City Councilman Nathan Samuel said.

The Department of Local Government Finance classifies this number as a surplus, made up from money not budgeted or spent in the last fiscal year that rolls over to the next. However, many finance committee members feel the term is misleading, preferring to call it “operating funds,” because much of the money could be spent in as soon as six months.

“I was a little taken aback by this $5.2 million,” Councilman Mike Smith said. “Last year when we were doing circuit breaker [cuts], and we sat down to nickel and dime it, it never mentioned about this amount of money being surplus. It’s not really a surplus. At any given time, it could be a big expenditure.”

The state of Indiana limits how much money can be collected in property taxes via a circuit breaker tax cap. For individual homeowners, property taxes are limited at 1 percent of the assessed value of the property; 2 percent for rental properties; and 3 percent for businesses. Any amount over the percentages cannot be collected by the taxing unit, such as a city or school district.

In 2013, the city council was saddled with a $3.2 million tax cut after the certified budget amount had been returned by the state. No cuts were required by the city council once the 2013 general fund budget was returned by the state — at $25.6 million — on top of the tax cap cuts.

Amy Deering, city controller, said she was not surprised to see this extra money, even though it surpasses 2013’s beginning surplus by more than $3 million. She said the surplus came from a combination of unspent appropriations from last year and from revenues, though she did not know exactly where those revenues came from without further research.