Indy Mayor Seeks Tax Repeal

In his first state of the city address, Indianapolis Mayor Greg Ballard said he would work for a repeal of the 65% income tax increase implemented in mid-2007 under former Mayor Bart Peterson.

Revenue from the tax hike, which pushed local income tax rates in Marion County to 1.65% from 1%, was largely earmarked to pay debt service on a planned $450 million pension obligation bond issue. But Peterson was voted out of office before the city could sell the bonds,  which have since become unnecessary under a recent state measure to take over responsibility for all local pre-1977 public safety pension obligations.

In his address, Ballard referred to the pension measure as one of his “big wins” — he had urged state lawmakers to take over the obligations during hearings on statewide property tax reform — and said it would save the county more than $1 billion over 30 years.

“Even with the parts of that legislation that will reduce our spending obligations, we will still face a reduction in revenues,” Ballard said. “This reduction in revenues needs to be met with a reduction in spending.”

In an effort to reduce spending, the mayor said he has asked all city and county departments to cut their budgets by 5%. The Republican also said officials need to be “mindful” of taking on more debt, noting that the city-county’s long-term debt is $5.7 billion. Ballard said he would urge the state to consolidate various layers of government to help bring down spending. 

While Ballard said most of the income tax increase has been funneled into additional property tax relief, a repeal of the tax is possible if Marion County is able to generate enough savings to provide relief in other ways.

During last year’s race, Ballard campaigned heavily against taking on more debt and raising taxes, and said he favored the total elimination of property taxes.

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