Mayor's budget slashes city spending 8.15.11

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INDIANAPOLIS (WISH) - Indianapolis Mayor Greg Ballard says the $1 billion budget plan he'll present Monday night will be "the tightest the city has seen in years." He says declining revenues will force the city to make deep cuts nearly across the board.

Ballard (R) made the comments while speaking with reporters late last week. He plans to present a full version of his budget proposal before the City-County Council Monday night.

“It’s been very, very difficult,” Ballard said, opening his remarks over what the city’s 2012 budget might look like. “It has been [difficult] for the last few years. There’s no question about that.”

With more people out of work, the city's income tax revenue has dropped by around $19 million during the last year, Ballard and City Controller Jeff Spalding said. But, that’s only one challenge facing city leaders in the coming years.

“There was a $100 million loan out there that they took out in 2005. We're still paying $9 million a year on that until 2021. I’d sure like to have that money right now. This will be the tightest in years. I seem to hear that every year, but this one truly is. Because of the lag in receipts, the recession is truly hitting the city at this point in time,” Ballard said.

To counter that loss, Ballard plans to call for $20 million to be sliced from the city's $570 million general fund. The cuts will not include public safety, which Ballard described as “99 to 100 percent flat lined.”

"We have cut non-public safety agencies in the last three years by five percent year after year after year. We did that because we saw this projected deficit. We have cut it five percent in the past years. This year, we're going to have to go to six percent," Ballard said.

To accomplish those reductions, 200 city employees would be laid off, all of them through attrition. In order to keep funding for police officers and firefighters intact, Ballard will propose the city take $40 million from a special downtown taxing district--called a tax increment financing or TIF district. Ballard was adamant that the move would not adversely affect downtown development.

“We've invested so much in downtown, frankly, it's time that downtown can give a little bit back for the rest of the city," he said.

The city will also receive $4 million from the Capital Improvements Board or CIB to pay for increased security costs during the upcoming Super Bowl.

Because the city’s Department of Public Works budget is separated from the general fund, things like street repairs and snow removal would not be affected by the cuts, Spalding said.
Other public services, however, may not be as fortunate.
Asked what effect the cuts might have on citizens, Ballard thought for a moment.

“The phone may not get answered as fast, and we may not be able to call as many people back. But, three years ago, we didn't even call people back from the Mayor's Action Center. So, will we see some sort of small degradation in services? Maybe, depending on where they are,” he said.

Ballard’s November challenger, Democrat Melina Kennedy wasn’t satisfied with that answer.

“Four years ago, Mayor Ballard made a campaign promise to repeal the income tax. Four years later, he's broken that promise. But, on top of that, he's raised taxes, rates and fees on residents of Indianapolis over 100 times. I expect after he's raised taxes and fees that many times, an honestly balanced budget that takes care of the critical issues in our city,” Kennedy told 24-Hour News 8’s Political Reporter Jim Shella.

Ballard pointed out that his proposed budget will address the city’s most critical issues--prioritizing public safety, and even adding what he called a “small” new IMPD recruit class and by keeping the city's current AAA credit rating, without raising taxes or borrowing money.

“The city had built up for the first time in history, I think, a rainy-day fund in 2010. That was used to support the 2011 budget, so those reserves are not available to us in 2012,” Spalding explained.

“There’s $80 million we’re going to set aside to make sure we maintain our ratings. We want to put that aside in case we ever get to a true emergency status, which we’re trying to avoid, obviously,” Ballard said.

Monday’s meeting is set to begin inside the Council chambers at the City-County Building at 7 p.m.

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