Indianapolis Mayor Submits $1.1B Budget

CHICAGO - Freshman Indianapolis Mayor Greg Ballard unveiled a $1.1 billion fiscal 2009 budget this week that follows through on campaign promises to trim borrowing practices, cut spending, and increase public safety expenditures.

Prior to presenting the budget Monday evening, Ballard went to the hospital briefly following chest pains and shortness of breath, his office said yesterday. He was back at work yesterday wearing a heart monitor.

Ballard, a Republican political newcomer who won a surprise victory over Democrat incumbent Bart Peterson last year, unveiled the $1.1 billion budget to the City-County Council Monday night. The council will hold hearings on the all-funds budget through September before voting on a final 2009 spending package.

"The 2009 budget focuses on government's core responsibilities, and it sets forth our plan to provide fundamental services without borrowing against the future," Ballard said in a brief budget presentation.

The $1.1 billion budget eliminates a $26 million shortfall - part of which stemmed from overestimating revenues last year - and projects a budget surplus of just under $5 million. The budget anticipates a steep drop in property tax revenue, but anticipates a 2.5% growth in income tax.

On the borrowing side, the city plans to issue up to $45 million for its Metropolitan Emergency Communications Agency, and another $150 million of tax anticipation notes to smooth out cash flow, said Kevin Taylor, executive director of the Indianapolis Local Public Improvement Bond Bank, the borrowing entity for the city and the county.

Indianapolis-Marion County has $5.7 billion of long-term debt, of which $2.8 billion is supported by property taxes.

Unlike previous years' budgets, the current budget does not rely on short-term borrowing to cover a long delay in property tax revenue collections. In 2007 the city borrowed about $250 million of property tax anticipation warrants to cover delayed payments, money that ended up covering daily operational expenses. This year the administration expects the payments to be on schedule, said deputy controller Jason Dudich. "This budget gets us shored up and says maybe we'll do a little borrowing for [cash-flow] timing, but not the extent that we did before," Dudich said.

Altogether the budget anticipates a $107 million drop in tax revenue in fiscal 2009. The decline is due to a new state law mandating property tax caps, as well as the state's decision to take over welfare funds and pre-1977 public safety pension funds for all local governments.

Under the new law, Indianapolis-Marion County is expected to lose about $30 million in property tax revenue in 2009 and more than $100 million in 2010. In addition to those property tax cuts, the city-county will lose those tax levies that formerly paid for the children and family services funds and the pre-1977 public safety pension fund, according to Dudich.

The proposed 2009 budget includes $36 million in cuts, including about $2 million in a reduction in federal grants. The biggest chunk is a $5.5 million cut in jail operations, followed by a $3 million cut in park funding. In crafting the budget, Ballard anticipated that voters will approve an initiative to consolidate county assessment duties under one position, generating a savings of $3 million in administrative costs.

Spending on police and fire departments is increased just under $20 million, and spending on roads and transportation infrastructure is increased about $5 million.

The budget leaves out $11 million in expected capital expenses for sewer system updates, because that money is going to come from general fund balance, not from current revenues, Dudich said.

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