As expected, the city of Jeffersonville will need to cut its 2013 budget to account for property tax cap losses. The total discovered is $3.2 million in reductions.
The state of Indiana limits how much money can be collected in property taxes. It limits property taxes for individual homeowners at 1 percent of the assessed value of the property; 2 percent for rental properties; and 3 percent for businesses. Any amount over the percentages cannot be collected by the taxing unit.
The city council approved the 2013 general fund budget at $25.6 million, the same amount that was certified by the Department of Local Government Finance.
“We knew they were coming,” said Councilman Nathan Samuel of the tax caps.
The city had been waiting for the amount, however, from the state. The city’s budget had been reduced in 2011 and 2011. Last year, the city was forced to cut $3.5 million out of the city budget to account for the caps.
To address this year’s cuts, the city council asked for some direction.
“We’re looking at ... the administration to tell us where you want that [$3.2] million to come from, where you want it cut,” Samuel said. “Ultimately, it’s our responsibility to finally approve the cuts and we will [but] we’d rather have the administration say, ‘this is what we’d like to have cut.’”
Mayor Mike Moore agreed that the city has been expecting the hit to the budget as a result of the tax caps, but added that he had not heard that a total had been returned to the city. As for being asked to identify an area in which to make the cuts, Moore said he will make a recommendation, adding he is not optimistic it will be accepted.
“The council has never taken my advice before,” he said. “This is the responsibility of the fiscal body of the city,” he added, referring to making the budget cuts.
Moore said that the recommended cuts will likely be across the board, with a suggested first look at reductions to be made to the council’s plans to build a $5 million sports complex off of Charlestown Pike.
The Jeffersonville Activities Multiplex Center, or JAM Center, is a multiple soccer and football field complex with a 37,000-square-foot multisport indoor facility.
The funding to pay for the complex is expected to come from money received for a bond anticipation note received for Vissing Park of $5 million for five years. The city would pay the loan back through Economic Development Income Tax and parks open space funding. If there is still a balance at the end of five years, the city could then issue a bond to pay the remaining amount.
“I seriously question the soundness to pay for the project,” Moore said.
BY THE NUMBERS
• Budget amount approved by the city council — $25.6 million
• Certified budget approved by the state — $25.6 million
• Tax cap reductions — $3.2 million
• Total 2013 budget — $22.4 million