By GARY POPP
NEW ALBANY —
New Albany Mayor Jeff Gahan says that changes in Indiana’s tax code will mean less money for the city.
“This action could result in a reduction in overall tax collections for the City of New Albany in the amount of approximately $1.1 million,” according to a press release.
Gahan said that changes in state tax code will result in public schools receiving a greater percentage of property taxes, which could result in the City of New Albany experiencing a reduction in their share of tax money this year. He said the decrease of city tax revenue is a forecast of the Department of Local Government Finance.
“These types of funding issues are always a possibility,” said City Controller Mary Ann Prestigiacomo in the release. “This is just another reason why we diligently work with department heads to ensure that expenditures remain on or under budget.
“There are many factors that will help minimize the effect of these potential circuit breaker reductions,” according to the release.
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 taxing units.
There are funding sources Gahan says can offset the revenue drop.
The city already received the spring settlement of the property tax collections from Floyd County, which were about $700,000 higher than the projected number given by the DLGF, according to the press release.
“Additionally, because of the steps the city has taken to reduce expenses when necessary, the general fund ended the 2012 calendar year with a positive balance. This year, spending has remained under budget thus far,” according to the press release.
Gahan stated in the press release, “While we know that funding reductions are always a possibility, my staff and I will continue working closely with the city council to monitor the situation as the year progresses.”