Ballard Previews Budget
When I came to Indy on Labor Day 2004, the first thing I did was look up Indy Star stories on the city’s budget. One of things that struck me was then Democratic-controlled City-County Council’s decision to take $100 million borrowed to pay for police and fire pension funds and put it toward operating expenditures for the 2005 budget. I always thought that was odd since using one-time dollars to pay for recurring expenses is usually bad fiscal management. At the time unemployment was averaging 5.5 percent and we weren’t in a recession.
Fast forward 7 years later.
Unemployment has gone up, the economy has gone down and the city has property tax caps. However, the city has somehow managed to live within its means. It is about as pretty as a naked Marion County Democratic Chairman naked (I missed the roast and toast Wednesday night), but so far, the early picture is good.
Ballard administration officials say the entire budget will spend about $1 billion this year, total. Income tax revenue is down by $19 million and property tax revenues are flat. Administration officials also say they’ve had to deal contractual raises with police and fire, rising fuel costs and, increased health care and pension costs. The city is also dealing with $150 million less in property tax revenue than it had in 2007.
Mayor Greg Ballard says there will be no cuts in public safety and criminal justice agencies (IMPD, IFD, Sheriff’s Department, homeland security, the courts, Prosecutor’s and Public Defender’s office, animal care and control). However their budgets will be flatlined. The city expects to start a new recruit class of about 25 officers and crime prevention grants will be funded at 100% of 2011 levels; $2 million. However, all other agencies will face a 6% across the board cut. And the 2012 base budget cuts will total about $20 million. Ballard says no money from Citzen’s deal, Rebuild Indy or Fiscal Stability Funds will be used for operating expenses. However it did have to deplete most of its reserve fund to help balance the budget. The city is using $80 million from the water/waste water deal toward the stabilization fund which it says will allow it to keep its AAA bond rating. As the economy improves that money will be put back into roads and infrastructure.
However, to help pay for public safety the city had to to take $40 million from the downtown TIF surplus, leaving more than $20 million in the required reserve fund. Officials say the TIF is simply paying back the city for downtown improvements. In addition, the CIB will pay $4 million to cover the public safety costs of the Super Bowl. And the city expects to eliminate 200 positions through attrition.
Ballard says the 2013 budget will produce some challenges as well with declining income tax disbursements from the state, however the budget is expected to turn around by 2014.
Democrats have already criticized the budget saying the Mayor is using money from the water deal to prop up the budget and accused him of spending millions on consultant fees.
The official budget will be introduced Monday night.
