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May 22, 2012

Jeffersonville budget cuts move forward

Council gives OK to $2.5M in cuts proposed by committee

JEFFERSONVILLE — The Jeffersonville City Council approved a resolution Monday night that moves forward with a little more than $2.5 million in budget cuts.

The council itself took the biggest part of that cut, with a hit of about $819,000. A major part of that included money that had been set aside for capital projects. The parks department budget was hit to the tune of about $294,000, again with capital spending being the major focus.

The city’s finance office and the Jeffersonville Police Department were among other big losers with budgets being reduced by about $278,000 and $160,000 respectively.

The cuts were approved Monday on a recommendation by the council’s budget committee — made up of council members Nathan Samuel, Lisa Gill, Bryan Glover and Mike Smith — which met on Friday.

The cuts were necessary because of property tax caps imposed by the state which limit the dollars that can be collected by municipalities.

The city needs to cut about $3.5 million in order to bring the budget in line with the caps. About $1 million is being paid out of existing fund balances. The rest is being made up by the cuts the council approved Monday.

The action is not final,  as officially the council has only approved a resolution instructing the city’s financial officer to advertise the cuts.

Samuel, who took the lead on recommending cuts, said the city expected to have to trim its budget but not by so much.

“We have a large budget but still, cutting $2.5 million is not easy.”

Jeffersonville will use about $19.3 million in property taxes if cuts are made final as proposed. The council creates and passes budgets in the fourth quarter of the prior year, typically based on input from city department heads. The Indiana Department of Local Government Finance gives final approval.  

The property tax caps that forced the cuts were passed by the Indiana Legislature first, then approved by voters as a part of a ballot referendum to write them into the state’s constitution.  

The caps limit property tax bills to 1 percent of homes’ assessed values, with 2 percent caps on farmland and rental property and 3 percent limits on business property. In November 2010, 72 percent of Hoosiers voted in favor of adding the caps to the Indiana constitution.

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