Indy Mayor, Council Leaders Agree on Tax Hikes

After months of debate, Indianapolis Mayor Greg Ballard and leaders of the City-County Council have agreed to several proposals, including a pair of tax increases, for the city’s $1.1 billion budget.

The agreement calls for an increases in the city’s car rental and admissions taxes on March 1, 2013.

The move is expected to raise $6.7 million the first year, which will go toward public safety costs. After the first year, up to $3 million of the revenue will go toward public safety, according to the mayor’s office.

The car rental tax would double, rising to 4% from 2%. The admission tax would rise to 10% from 6%. The National Football League’s Indianapolis Colts have publicly protested the move, saying it would mean lower attendance at games.

The budget also reduces 2013 spending by 5% and asks the Capital Improvement Board, which runs the city’s sports facilities and convention center, to pay the city $5 million for public safety in 2013. Ballard also agreed to restore $32 million in local option income tax for various county agencies that he had previously cut from the budget.

Together, the moves will raise $12 million in new general fund revenue starting in 2014. That leaves a $6 million shortfall in 2014 and $42 million in operating reserves by the end of 2013. The mayor and council leaders plan to hold monthly meetings to review the city’s finances.

“I view budgeting beyond just one year, and this compromise puts the city in a much stronger fiscal position in 2014 and beyond,” Ballard said in a statement.

The agreement comes after the mayor in late December vetoed a City-County Council proposal that would divert money from the 2011 sale of the city’s water and sewer system from infrastructure to public safety.

When he vetoed the measure, Ballard said: “Using one-time money for an ongoing expense is unsound fiscal policy.”

The council will vote on the proposals on Jan. 28.

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