County governments, municipalities and school corporations across the state are just beginning to cobble together fiscal plans for 2011. And they’re in the grip of a powerful vise.
At one end, Indiana’s property tax caps are reducing tax collections. At the other, the slow recovery from the Great Recession continues to diminish real estate values. In fact, the assessor’s office forecasts property values across Howard County to be lower than last year.
It’s a pretty tight squeeze.
Over the last two years, the city of Kokomo has trimmed 12 percent of its work force. It opened its own employee health-care clinic to control spiraling medical costs.
Outside of wage freezes and a spottily enforced hiring freeze, Howard County has done nothing. It tasked three county councilmen to recommend cost-saving measures at its budget hearings last year – and ignored most of them.
Instead, the council decided to use $2.5 million of the county’s operating balance to cover costs.
The county could increase the property tax levy. Many Howard County homeowners are paying nowhere near 1 percent of their houses’ assessed value – the maximum under the tax cap.
But before considering hiking the levy, county government first must get serious about reducing its costs. It must reduce the number of paid holidays – 14 this year. It must require its employees to contribute a portion of their Public Employee Retirement Fund payments; currently, the county pays the entire amount for each of its workers. And it must stop paying employees while they’re at lunch.
The vise won’t loosen its grip any time soon.