Plans would give library system a share of Marion County income taxes 1.12.11

INDIANAPOLIS STAR
The Indianapolis library system has coped with falling property tax revenues the only ways it can: by shedding employees, buying fewer books and materials, and slashing hours at nearly all its branches, narrowly avoiding closures.
But library leaders, city officials and state legislators think they have found a way to make up for property tax caps that are eating into the source of 85 percent of the library's budget. They are exploring ways to provide the library with a small cut of county income taxes, which will pump $250 million into Marion County coffers this year.
More than 60 percent of that -- $155 million -- will be divided among Indianapolis and county agencies, homestead credits, the county's nine townships and four smaller cities and towns, including Lawrence and Beech Grove.
Some legislators and city leaders say it's only fair to give a portion to the Indianapolis-Marion County Public Library, even if that reduces other government units' shares.
One scenario would give the library 2 percent of Marion County's distribution for local government. That's about $3 million a year.
Libraries already receive a share in most counties that collect local income taxes. But different rules that apply to Marion County because of city-county consolidation don't address the library system.
In coming weeks, the General Assembly is expected to debate legislation being drafted by Sen. James Merritt, R-Indianapolis, that would give the City-County Council authority to divert some income tax revenue to the library. His proposal, contained in a larger Marion County government reform bill, also would give the Indianapolis mayor seats on the library's board.
Council leaders are working out details of a resolution that would urge the legislature to amend the current law.
Library advocates will be watching both legislative bodies closely.
The Sustainable Library Citizens Coalition is recruiting members for a "read-in" at the City-County Building on Jan. 24, when the council is expected to vote on its resolution. They will go to the Statehouse on Feb. 8 for a similar event, spokesman Jim Mulholland said.
"I'm hoping we can fill up the hearing room and the hallways around it," he said. "We're over 1,000 (members) now, and we keep growing every week. There's a lot of people who continue to be concerned about this."
The library's financial troubles have become a perennial source of heartache.
The system's $37.9 million operating budget for 2011 was balanced last fall by reducing hours 26 percent across nearly all branches, laying off 37 employees and cutting $1 million in spending on books and materials. At the last minute, the council added $1 million in property taxes.
Proposals for the library's future focus on giving the system a small share of the basic 1 percent county-option income tax.
That is the largest component of the county's 1.62 percent income tax. The rest is earmarked for additional public safety spending and replacement of money lost when agencies freeze their property tax levies. The library will receive an estimated $3.8 million this year from the frozen levy category, but that doesn't represent additional money beyond what it had been receiving.
A new cut of basic county income taxes would provide stability, library leaders say.
"We want to get this right so we're not dealing with this every year," Library Board President Thomas Shevlot said. "Hopefully getting these things in place gets us a little more on solid footing and allows us to be responsible in our growth."
Income tax collections rise and fall with the economy, as many libraries beyond Indianapolis have learned since the recent recession.
"(But) the economy's going to get better," said Councilwoman Jackie Nytes, a Democrat. "And we're going to be positioned to have something that's going to be a bit more equitable."
At least two legislators are drafting bills, but they -- and City-County Council members -- differ on the best approach.
Some, including Nytes and Rep. John Day, D-Indianapolis, would prefer that the legislature set the share for the library in state law as a guarantee.
But Merritt, whose party controls both chambers, and Council President Ryan Vaughn, a fellow Republican, prefer a different tack. They would add the library to the law's list of allowed recipients for Marion County but leave it to the council to decide how much the system receives.
Indianapolis Mayor Greg Ballard said he would prefer giving local leaders more flexibility. His chief of staff, Chris Cotterill, has worked with Merritt on his Marion County government reform bill, which focuses on reducing townships' autonomy. It was still being finalized Tuesday.
Merritt's bill also would give the mayor -- who felt the sting of public outrage over the library funding crisis last year -- more direct influence over the library, with four appointments to its board, according to Cotterill. The council would get three.
The mayor now has no appointees on the seven-member board. Three are chosen by the County Commissioners, two by the council and two by Indianapolis Public Schools.
"We and the next mayor and the next mayor should have (a more direct role)," Cotterill said. "Clearly that's what the people expect."
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