Taxes will be going up next year in Fort Wayne. The only real question is by how much and where they will fall.
Mayor Tom Henry and a bevy of local officials gathered Monday to prepare citizens for the reality created by state property tax caps: Either taxes must be raised in other areas or services must be cut.
“We could do no tax increases at all, but that would force major cuts in essential services,” said City Councilman John Crawford, R at-large, the council’s budget hawk. “Or we could consider all the options.”
Though raising property taxes isn’t much of an option – the city can raise them some because it has held them below the maximum in recent years – there are alternatives such as a local income tax that can be used.
At the same time, the city is behind on maintaining essential services, meaning status quo is not a pleasant option either.
The city fire department is 30 firefighters below the 375 authorized but cannot afford an academy class. It also needs to replace six fire trucks but cannot afford to do so.
The police department is 21 officers below its 440 authorized and will lose more to retirement this year. The city is behind on road maintenance by an estimated $60 million.
“The status quo is not an option that’s on the table,” said John Stafford, director of the Community Research Institute at IPFW and a member of the mayor’s fiscal policy group formed to find solutions. “Something will have to change.”
Some of the options for change include moving the cost of fire hydrant maintenance from property taxes to utility bills, which would raise bills about $2.50 a month but free up about $3.5 million to go toward the projected $6 million deficit for 2014.
Requiring city employees to coordinate insurance benefits with spouses could save an additional $2 million, officials said.
Those two changes would cover most of the expected shortfall, officials said, but would not address needs such as roads, parks, or fire and police academy classes.
A local income tax, officials said, would raise an estimated $15 million for those needs. Then, the city could use $5 million over five years from the Legacy Fund.
Henry said he would commit to cutting operating expenses by $5 million as well. The administration also plans to explore annexation possibilities.
“We know that difficult decisions will have to be made,” Henry said.
Those decisions will come in the next few months; Henry wants a plan in place by the end of June before work on the 2014 budget begins.
