Update - Budget Overview

The complete budget still has not been published online, and hopefully will be by week's end.  Therefore I am unable to tell you what the real overview is, not even the budget total.

On Tuesday night, City Controller Jeff Spalding gave the Admin & Finance committee his overview presentation.  Here are some highlights that affect how the 2013 budget is constructed.

There are three agencies that primarily charge other departments and agencies for their services, rather than get revenue from the various city or county funds. 

Over the last few years, the ISA (information services agency) has underwritten some of its actual costs by using excess money from one of its own funds.  That fund is nearly depleted, so this year the true costs are being charged to the various departments for their technology usage.  ISA will charge $30 million for its services in 2013, up $4 million from this year.

OCC (office of corporation counsel) will charge  $3.7 million, up $146,000 from this year.

The MAC (mayor's action center) will charge $1.2 million, up $0.4 million from this year.

[keeping track --- so far about $4.5 million additional costs demonstrated]

In addition, certain other costs are rising - retirement benefits, health insurance, rent for instance.  No price tag was mentioned for these rising costs.

They also want to include a fund from which merit raises to non-public safety employees would be taken.  If I understood it correctly, $3 million would be set aside for these raises.

[keeping track -- so far about $7.5 million additional costs demonstrated with others mentioned, but no price tag noted]

The budget for each department and agency is said to begin with the 2012 budget and add additional revenue to cover all of these added costs.  (This is apparently not the case for at least one of the budgets presented in the first two days of hearings.)

Income tax revenue is expected to be $233 million, down $10 million from last year which saw a $47 million boost due to correction of a State distribution error for 2011 and 2012.  $30 m of that returned money was put into a rainy day fund and some will be tapped for 2013. 

The City-County expects to actually collect, after the tax caps are subtracted, $307 million from property taxes in 2013, down $10 million from this year.  The tax caps for the city-county alone, should eat up $44 million in 2013, up $7 million from this year.  Remember that the City's own TIFs cause about a third of the tax cap problem for all taxing units throughout the County.  Other 'incentive' programs like abatements also increase the amount of money governmental units could collect but don't because of the tax caps.  And, don't forget the thousands of acres the airport does not need for aviation purposes, but is keeping off the tax rolls anyway.  Returning these acres to private ownership and therefore to the property tax rolls could lower all of our property taxes and simultaneously increase the amount of money governmental units actually recieve.

[keeping track --- so far some of the revenue sources of the City-County are down a total of $20 million]

The Controller said that the difference between the 2012 plus additional costs and the expected 2013 revenues, is $65 million.  He plans to fill that difference by drawing $20 m from fund balances, using $17 m from the rainy day fund, and by taking another $10 m from one of the TIF districts (they haven't decided which ones yet).  They want to end the homestead tax credit in order to net an additional $8 m for the City in COIT money. (The homestead credit is funded with COIT money to the tune of $13 million.  When that credit is removed from tax bills, the tax cap credit will increase to cover the difference for those homeowners who already hit the caps.  That amounts to $5 million increase in tax caps.) They want to institute a charge for use of take home cars to gain $1 m.  They want to save $5 m by suspending the 3% raise for fire and police union employees, $3 m for the election board because it is not an election year, and save $1 m in IMPD and IFD overtime charges.

We will revisit the budget overview once the entire budget has been released.