“We’re not going to see a net increase; we’ll see a net decrease in our levy.”

That was the bad news Porter financial consultant Karl Cender delivered to the Town Council last night during a 2010 budget-preparation workshop.

While the levy --- the maximum amount a goverment unit is allowed to collect in property taxes --- is predicted to increase by about 3 percent or $57,000 next year, explained Cender, the tax circuit-breaker caps are projected to cut Porter’s income by about $70,000 for a possible $13,000 net decrease.

Many other variables like assessed valuation and miscellaneous revenue factor into the equation, said Cender, making firm numbers impossible at this point, especially when the state hasn’t approved the 2009 Porter budget.

Cender estimated the maximum levy for this year will be approximately $1,872,896 if a requested 4 percent increase is granted, but the full amount won’t be collected unless 100 percent of taxpayers pay their bills.

After a 60-minute discussion Monday the council agreed to advertise the individual general fund, which includes police, and the Public Works, fire and park budgets 3 percent higher for 2010 but to put the extra money in capital outlays in case it has to be pulled out later when a budget order is finalized.

With about $195,000 yet to be received from the 2008 budget but an estimated $150,000 shortfall from what was advertised for 2009 anticipated, town officials and council members alike asked Cender how they’re ever going to get ahead.

Town Council member Dave Babcock asked Public Works superintendent Brenda Brueckheimer if she could run her department in 2010 with the same money as projected for this year.

“No,” she replied. “I’m here to fight for money and my budget.” Brueckheimer and police chief James Spanier urged the council to let department heads increase their individual budgets by 3 percent, even if later it has to be trimmed.

Cender said state officials want local governments to rely more on local-option income taxes and increased fees than property taxes.

“It seems like we’re losing ground every year unless you raise fees on everything,” said Councilman Jon Granat. Clerk-treasurer Carol Pomeroy said legislators downstate cut property taxes and look like heroes. “But who’s taking the hit? You guys,” she told the council.

Its president, Michele Bollinger, said merely increasing fees won’t solve the problem. “An extra $5 on 500 beach (parking) permits doesn’t do much.”

If department heads aren’t going to see real increases in their budgets, how to buy/replace equipment and motor vehicles and do needed projects was discussed. One avenue is Porter’s rainy day fund.

Said Spanier regarding the fund, “We’ve got all kind of road and sewer problems; at what point do we start spending it? Why let something go that will cost you more later?”

Cender said Porter’s been conservative and transfers money into the rainy day fund, from which loans are taken to fund town operations while awaiting Porter County’s delayed distribution of property taxes.

Granat said a healthy rainy day fund spares the town from outside borrowing and paying interest, yet needed projects and purchases aren’t being made because the fund is tied up in loans.

Pomeroy said it takes about $200,000 a month to run the town and pay its bills.

The council mulled setting a cap on the rainy day fund above which the balance could be spent. Cender recommended leaving enough to fund town operations for at least three months.

Another source of money is the town’s approximately $400,000 annual share of Porter County’s economic development income tax or CEDIT. The Town Council decides how and when the money is spent with input from department heads.

Cender said with no state budget order in place for 2009, Porter officials can’t overspend this year because they may have to pay it back. “The state should never be allowed until the end of the year to certify this,” observed Cender.

He told council members they’re not alone in Hoosier tax limbo. “A lot of communities are in the same boat and in a lot worse shape than you are.”

Posted 6/23/2009