Published: April 16, 2008 10:44 am            

Jeffersonville tax revenue more than expected

$79,000 in additional income will help with budget crunch, councilman says

The city of Jeffersonville will have slightly more money than initially anticipated, thanks to a larger-than-expected tax settlement with the county.

A tax settlement is the money that comes in from the county after property taxes are assessed.

The city will net about $79,000 more than expected, said Jeffersonville City Councilman Ron Grooms, who heads the council’s Budget and Finance Committee. The additional funds are likely a result of money collected by tax sales and auctions of property on which residents hadn’t paid their taxes previously, he said.

The total could have been higher, at about $239,000. Grooms explained that the county deducted money from that total — about $100,000 — for excise taxes, about $55,000 for election expenses and about $12,000 in administrative fees.

Grooms said despite the deductions, the unanticipated revenue will help the city with its budget crunch.

“This is much better than it being a deduction the other way,” he said.

The city is facing what is currently a $923,000 projected budget shortfall. However, many budget cuts have been proposed that would bring the total to an approximately $464,000 shortfall. Those cuts are expected to be made official via council vote next week.

The problems started because the city did not receive a budget order from the state — for its 2007 budget — until November of that year. The budget order that the state did eventually approve was far less than what the council submitted.



More money woes on the horizon?

City leaders also met with representatives from consulting firm Crowe Chizek and Company LLC on Tuesday morning to discuss how state legislative changes will affect city government finances.

“Cities and towns are going to have to adjust to having less revenue,” Grooms said.

A 1 percent cap on homeowner property taxes — passed during the Indiana General Assembly session earlier this year — will take some money out of city funds, he explained. Additional revenue will be lost as the state phases out reimbursements for homestead tax credits by 2011.

“The state is basically telling cities and towns that they are going to have to operate on less revenue then they have in the past,” Grooms said.

The only way that municipalities will be able to make up that lost state income is through an adjusted gross income tax — something county councils across the state are not in the mood for currently, he said.

        

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