Schools are back in session and football season is upon us.
It can mean only one thing — budget-wrangling time. Yes, it’s that time of the year, when elected leaders forecast how much funding will come into government coffers (the amount always seems to go down) and craft spending plans in line with expected revenue.
It never seems to get easy, even as the Great Recession that rocked Elkhart County and the rest of the nation in 2008 and 2009 gets smaller in the rear-view mirror. In fact, officials from Elkhart County and the cities of Elkhart, Goshen and Nappanee say it’s been a challenge putting together 2014 budgets, that they’re forever trying to do more with less.
Tax caps and continuing dips in funding from property taxes, most notably, are still a big concern. “So no, it is not going to be any easier this year,” said Elkhart County Commissioner Mike Yoder.
Nappanee officials are largely done with the budgeting process, while Elkhart County, Elkhart and Goshen leaders are prepping for final deliberations to put their budgets together. Here’s a glance at some of the issues officials will be considering.
GOSHEN: AN ‘ENVIRONMENTAL FEE’?
Kauffman wouldn’t get into specific numbers or details when contacted this week. He was preparing to send an outline of the budget proposal to members of the city council and didn’t want to spoil the surprise for them.
One of the big issues, though, is making up for an expected loss of around $4 million in property tax funds in 2014 because of tax caps, enshrined in the Indiana Constitution and meant to protect property owners from sharp tax hikes from year to year.
“I’d say that there will be new options on the table. I’ll say that,” Kauffman said.
Jim McKee, president of the Goshen City Council, was more forthcoming, noting three new revenue generators that may get consideration by city leaders — a $12 a month “environmental fee,” a 1 percent food and beverage tax and a new $1 a month charge for cable television customers.
The $12 fee would be applicable to each of the city’s 10,000 or so water and sewer customers, generating perhaps $1.2 million a year. The fee wouldn’t specifically be tied to garbage collection costs, per previous discussions, but rather, would be also aimed at covering costs related to leaf pickup and snow removal, as McKee described it.
The food and beverage tax, tacked on to bills at restaurants, and the cable TV fee would generate perhaps $1 million a year altogether.
McKee isn’t enthusiastic about the $12 fee, worried about how it would impact those on a fixed budget. But he’s open to at least discussing the other two proposals, though it’s too early to tell if any will gain traction. “We’ll bring them up. I’d like to discuss them,” McKee said.
The first reading of the Goshen budget is set for Oct. 1 and adoption is scheduled for Oct. 15.
ELKHART: ‘THERE’LL BE SOME ISSUES’
Elkhart Mayor Dick Moore said expected property tax losses for 2014 “make the budget process pretty rough.” Still, the city’s been able to provide key services and all departments remain open.
“Our concern is how much further can you go ... before something has to give,” Moore said.
Whenever he presents a budget proposal, he considers it ready to go. But members of the city council have usually had their own ideas in years past, wanted to trim spending by even more, and he expects back and forth this go-round, too. “There’ll be some issues, I’m sure,” he said.
The mayor’s budget plan for 2014 calls for $54 million in spending, up from $52 million in 2013 due mainly to rising health care premiums. The new plan also calls for a 2 percent salary hike for employees.
Elkhart city budget meetings are set for Tuesday, Wednesday and Thursday next week, with a tentative meeting date of Sept. 24 as well. Next week’s meetings start at 6 p.m. each day and will be held in the council chambers at Elkhart City Hall, 229 S. Second St.
ELKHART COUNTY: LOCAL OPTION INCOME TAX?
Elkhart County leaders will have to trim $6.5 million to $7.5 million from the various 2014 spending proposals put forth by county department heads. The plans allow for a 3 percent wage increase for county workers, something the officials seem intent on maintaining.
Still, the gap remains and several ideas are on the table to narrow it, including continued use of reserve funds and use of economic development income tax money for things other than road maintenance and repairs, the norm, according to Yoder, the Elkhart County commissioner. “None of them are very pleasant,” he said, noting that the county’s reserve funds are quickly disappearing.
The stagnant assessed valuation of Elkhart County property bears in the situation. Property tax revenue is based on the assessed valuation — the higher the number, the more property taxes that can potentially be tapped — and the AV hasn’t shown signs of springing northward. “My sense is we can’t grow that (AV) fast enough,” Yoder said.
As such, it might be time to look at the idea of a new local option income tax, Yoder said, a notion that typically gets shot down whenever it’s brought up among county leaders. Some, Yoder added, have even broached the idea of a food and beverage tax, as, apparently, Goshen officials might discuss.
Elkhart County has trimmed an estimated 20 percent from its general fund expenditures over the last five years, by Yoder’s tally.
The county’s budget hearings are set for Tuesday, Wednesday and Thursday next week, starting at 8:30 a.m. each day at the Elkhart County Administration Building, 117 N. Second St., Goshen. The first reading of the budget is set for Oct. 1 and adoption is scheduled for Oct. 2.
NAPPANEE: PAY HIKES FOR EMPLOYEES
The proposed 2014 budget for Nappanee calls for total spending of $8.3 million, up around $166,000 compared to 2013, according to Nappanee clerk-treasurer Kim Ingle. That includes 2 percent pay hikes for city employees.
“We’re trying to give pay raises and that’s probably the No. 1 increase,” said Nappanee Mayor Larry Thompson. Otherwise, he said, spending in the city is holding pretty steady.
The budget is to be formally adopted on Oct. 21.