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News-Sentinel.com Your Town. Your Voice.

Henry's 2013 budget includes tax hike for most Fort Wayne households

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.The Associated Press
Friday, September 21, 2012 12:01 am
Mayor Tom Henry's proposed 2013 budget would avoid cutting services or spending down the city's cash reserves, but would rely on about $6 million in extra taxes amounting to $25 per year for the average homeowner.Henry unveiled the $174 million spending plan Thursday in a news conference. The budget calls for the city to try for the maximum amount of property tax revenue allowed by the state, raising the total 2013 levy to $112 million from about $106 million this year.

Just under $140 million of the proposed budget would be funded through property taxes and other direct city revenues. The remainder would come from a variety of fees and state sources.

The increased tax levy could set up a showdown between Henry's administration and Republican City Council members who have called for the mayor to freeze property taxes and instead use the city's cash savings to fill a budget gap of between $3 million and $6 million.

But Henry argued that the tax increase is a better option because, as a rule of thumb, the city tries to keep enough cash on hand to match 10 percent of the total budget.

“We need to keep a certain amount of cash reserves on hand,” Henry said Thursday. “Not having any cash reserves, to me, is irresponsible.”

Councilmen John Crawford, Mitch Harper and Russ Jehl urged the mayor last week to avoid any tax increases, saying the city should start using its cash reserves and $75 million from its former electric utility to bridge its financial gap.

Council President Tom Smith, R-1st, said Henry would likely have trouble getting the Republican-controlled council to approve the tax increases, which would allow the city to collect its maximum levy for 2013, plus an increase that was originally proposed as part of this year's budget.

“Bringing in last year's levy, plus an increase for this year – that kind of double dip, I don't know if council is going to go for,” Smith said.

The property tax increases – about $2 a month for a home valued at $100,000 – would apply to about 60 percent of Fort Wayne households, said city Controller Pat Roller.

The tax increases would have their greatest impact on people with lesser-valued homes because the other 40 percent of homes – mostly in wealthier areas such as Aboite and Perry townships – have already hit the 1 percent cap placed on household property taxes under the Indiana constitution.

Although Henry's budget would call for $112 million in total property taxes, the state-imposed caps are projected to save property owners about $15 million in 2013, reducing the city's net revenue to roughly $97 million.

Overall, the 2013 budget appears to show an increasingly tight fiscal outlook. For example, spending in most departments will go down, and Roller said Fort Wayne will do only about $2 million worth of street work in 2013 – a mere fraction of the city's construction needs.

The city's biggest division, the Fort Wayne Police Department, would get 70 new squad cars valued at $3 million after receiving no replacement vehicles this year. But that would still be 20 fewer cars than needed, police Chief Rusty York said.

York said his department would also forego a new recruiting class for the second year in a row, even as the department loses officers to retirement.

“We're 21 officers down,” York said. “As time goes by, we lose officers through retirement, so it's going to become more and more critical,” to recruit new officers.

Council is expected to begin a series of hearings on the budget Tuesday, with final passage scheduled for Oct. 23.


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