Ballard, Council leaders reach city budget agreement framework

INDIANAPOLIS (WISH) - Indianapolis Mayor Greg Ballard announced Monday that the City-Council President and caucus leaders have agreed on a framework for next year’s city budget. The move comes after months of negotiations.

If approved by the council, the agreement would result in the restoration of $32 million in funding for city offices. That funding was stripped away by Ballard last fall through a line-item veto in an effort to force negotiations on additional spending cuts.

The city faces a projected $35 million budget deficit next year.

Under the agreement, the 2014 deficit would be reduced to $6 million.

“The benefit with this budget deal is that we will only have a $6 million gap out of about a $600 million general fund, so you're talking about 1 percent,” said Ballard’s Communications Director Marc Lotter. “We also have $42 million in the bank in the rainy day fund that can be used to offset some of that as we still hope for the economy to improve.”

But, the budget would also raise around $12 million in new revenue for the city, generated largely by increases in two tourism related taxes: a two percent increase in car rental taxes and a four percent increase in admission taxes on events run through the Capital Improvement Board. That includes everything from Colts, Pacers and Indians tickets, to events at Bankers Life Fieldhouse, Lucas Oil Stadium, Victory Field and the Indiana Convention Center.

That revenue agreement would allow the city to more accurately budget in the coming years, Lotter said.

"I view budgeting beyond just one year, and this compromise puts the city in a much stronger fiscal position in 2014 and beyond," said Mayor Ballard in a news release.  "We still must do some heavy lifting to control spending, find new efficiencies and address our public safety/criminal justice system, but this agreement will provide the City the resources it needs to continue funding critical operations."

According to figures released by the Mayor’s office late Monday, the agreement would also reduce operational spending by 5 percent. Individual department budget appropriations would be made in February. In addition, the Capital Improvement Board would pay the city $5 million for public safety use this year. That funding was originally set aside to be used for repairs on the Capitol Commons Garage. Now, the City of Indianapolis will fund the cost of the repairs through a special downtown taxing measure known as Tax Increment Financing, or TIF.

The Mayor and Council would also form a bipartisan commission to make a recommendation on the elimination of the Homestead Credit Subsidy for the 2014 budget. If approved, this would generate about $9 million in additional city funding.

“The simplest way to look at this is to say that it’s about 2.5 dollars in spending cuts for every 1 dollar in new revenue that would be raised,” Lotter told 24-Hour News 8. “Mayor Ballard really wanted a good compromise where we were able to look forward and put the city on strong financial footing in the years ahead--not just this year. So, when you look toward 2014 and beyond, the city is going to have not only reduced spending, but also a little bit of increased revenue which helps us address the ongoing needs of the city, especially when it comes to public safety.”

Council President Maggie Lewis said the swap of dollars through the CIB will help boost public safety.

“Our agreement strengthens our partnership with the CIB and identifies fiscal resources needed to address public safety concerns, which were central to the budget that the council passed,”  she said in a news release.

Still, even with the additional funding, the council’s original budget did not include money for a new IMPD recruit class. That has not changed in the agreement, Lotter confirmed, though negotiations are nearly complete on plans to hire “lateral recruits” to replace around 40 officers who will be retiring this year. Those recruits would already be certified law enforcement officers in other jurisdictions.

"I applaud Mayor Ballard and the Council for working together to find a resolution to the budget challenges before us,” said Scott Miller, president and CEO of the Indianapolis Chamber of Commerce. “This is proof once again that we as a community can tackle tough issues by working together for the betterment of our city. We at the Indy Chamber look forward to working with both Council caucuses and the Mayor’s office in the coming months to address the long-term challenges.”

Councilors are set to debate the agreement during their regular meeting on Monday night. The measure is likely to face a final vote on January 28.