The City of Marion will, once again, be the most affected by the State of Indiana’s circuit breaker caps.
Circuit breakers, also commonly referred to as tax caps, will withhold more than $3.7 million dollars from the city’s coffers, according to estimates from the Indiana Department of Local Government Finance released last month. The amount is the highest for any government body in Grant County and more than the $2.9 million in cap losses the DLGF estimated for 2017.
Indiana’s tax caps limit how much tax revenue local government bodies can collect on homestead, residential, commercial and personal property. The caps keep more money in local residents’ and businesses’ pockets, but they pose a challenge for governments, such as the City of Marion, whose assessed values aren’t increasing enough to offset increasing tax cap losses. The caps are a part of what officials look at when drafting a budget.
City council members are expecting to receive the proposed 2018 budget later this week. Budget hearings are currently scheduled for Sept. 12-14.
The city adminstration has had its financial adviser Umbaugh & Associates highlight the city’s financial situation both in the present and for the foreseeable future. According Umbaugh, the city needs a little more than $1.3 million in additional revenue for the next five years to meet its debt comfortably and build up cash reserves.
To do that, Umbaugh has pitched raising income taxes, implementing a payment in lieu of taxes for Marion Utilities, a food and beverage tax and more. But the ideas have gained little traction from a city council that is reluctant to raise taxes or utility bills for the city’s residents.
Because of no new major source of revenue coming the city’s way next year, Marion’s 2018 budget is expected to very similar to 2017’s budget.
“It’s going to be very tight,” Marion Mayor Jess Alumbaugh said when asked about the city’s 2018 budget.
City Controller Julie Flores said in an email last month that the city’s 2018 budget will most likely not include any pay raises for city employees, nor will it address much of department heads’ wishlist to establish a formal maintenance and replace plan. It will also likely not make a major dent in the city’s health insurance fund. According to Umbaugh, the city’s claims continue to outpace money coming in. The accounting firm estimates the fund will reach negative $5 million within the next three years if nothing is changed.
“For (the) 2018 budget I would have liked to have included capital asset items each department requested in the comprehensive plan and been able to budget for reducing insurance deficit. But without additional revenues, it doesn’t look like that will be possible,” Flores said in a email.
Instead, Alumbaugh said the basic necessities will be prioritized, similar to 2017.
“The needs are real, but we will take care of the basic needs,” Alumbaugh said.
Copyright © 2024 Chronicle-Tribune