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February 25, 2012

Clark County still looking for budget answers

Provision in Senate Bill to restore county levy is removed

JEFFERSONVILLE — The removal of a provision from an Indiana Senate bill may cause Clark County’s budget problems to continue.

The county has been looking for ways to cover budget shortfalls since the Clark County Council cut its maximum levy by 25 percent in 2007 and a provision included in Senate Bill 344 would have allowed Clark County to restore its maximum levy. But that provision was removed by State Rep. Ed Clere, R-New Albany, who also represents a small portion of Clark County.

“I couldn’t support a legislative-imposed tax increase that would have reversed a local decision to cut the tax,” he said. “The bill as it passed out of the Senate would have led to a property tax increase to most, if not all, Clark County property tax owners.”

According to the bill’s fiscal impact statement, if the provision were left in the bill, Clark County would have been able to recover $579,936 for 2013. However, the circuit breaker would cut out some of what the county ultimately collects.

“Assuming that the county would increase its property tax levy by these amounts, circuit breaker losses would grow for civil taxing units and school corporations by an estimated $173,000 in 2013, $180,000 in 2014 and $185,000 in 2015,” the fiscal impact statement read. “Net property tax bills would be increased by just over $500,000 per year. In addition, TIF proceeds would increase by about $100,000 per year.”

While an increase in the levy would help, it would still not cover the shortfall the county is facing year-to-year.

Clark County Attorney Greg Fifer said an examination of the expenses the county has paid during the past few years put its annual costs at about $18 million. The county council approved a budget for 2012 at $14.5 million.

“If it takes $18 million to fund government, and we only get $14 [million] ... somebody’s going to get shortchanged,” he said. “There just wasn’t that kind of fat to cover what was cut in 2007. It ended up costing us about $1.5 million per year.”

He added the county cannot continue to operate the way it has been. Since cutting the levy the county has been forced to use up its reserve funding, and in 2011 several county offices issued mandates to cover operational expenses.

“It’s dysfunctional,” Fifer said.

And although restoring the levy cut would not eliminate a shortfall, Fifer said “I think it would help dramatically.”

Clere said if the county council had maintained the levy, it would still be inside the property tax caps, but an increase now would go outside the levy and be an additional burden to taxpayer. He added there was discussion to allow for a local referendum that would allow Clark County residents to decide whether or not to restore the levy. But a referendum, if passed, would be outside the levy and not be subject to the property tax caps. It would add the $173,000 back onto the amount the county could collect for 2013.

“Clark County is in a difficult situation,” Clere said. “I want to be helpful, but I feel like if there’s going to be a decision to reverse the 2007 decision, it has to be local decision, not a state decision. I regret the fact that decisions made locally may cause hardship for individuals, but at the same time I can’t support reversing that local decision without local buy in.”

But Clere, along with Indiana Sen. Jim Smith, R-Charlestown, who introduced the language into the bill, are still working to find a resolution.

“I’m trying to work with him to find a way to help Clark County,” Clere said.

Clere maintained that he would not add a provision back into the bill that would allow the county to go outside the levy to collect additional funding.

The bill has passed out of the House Ways and Means Committee and will be up for a second reading in front of the House on Monday, he said. Fifer said the provision could be added back into the bill at that time, when it will go before the conference committee.

Clark County is also seeking to recover funds from an excess levy appeal that has been filed with the Indiana Tax Court, which is not expected to be heard until some time this summer, and the county’s certified budget amount has yet to be returned by the Indiana Department of Local Government Finance.

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