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Hogsett's budget plan passes with wide support despite underfunding concerns

October 9, 2017

The Indianapolis City-County Council on Monday night voted overwhelmingly to approve Mayor Joe Hogsett’s $1.1 billion spending plan for 2018.

The budget, which passed the Democrat-controlled council 21-2, has revenue that matches expenditures and projects a roughly $200,000 surplus. Hogsett has called the plan the city’s “first balanced budget in a decade,” although that label has drawn disagreement from opponents.

"This bipartisan group accomplished what we set out to do at the beginning of this administration: hold the line on spending and erase the structural budget deficit without selling city assets, relying on one-time cash infusions, or raising taxes to make ends meet,” Hogsett said.

Aiding the mayor was the fact that Indianapolis is on pace to collect roughly $60 million in additional revenue next year. The budget expects an increase in $20 million in property tax revenue—resulting from an improving economy, not a tax increase—as well as $20 million more in new gas tax revenue approved by the Indiana Legislature earlier this year, $6.5 million more in stormwater fees, and a $10 million increase in various grants.

But despite the overwhelming council support, many Republicans expressed concerns about the possibility that the budget is underfunded.

"I’m going to watch like a hawk fiscal appropriations next year,” said Republican Jeff Miller, who voted for the budget.

Miller said that while “I do firmly believe this is one of the best budgets we’ve gotten,” he believed the mayor’s administration was “trying to be too clever” with its characterization of the city’s deficit issues and whether the budget is structurally balanced.

The budget does not include the city’s plan to eventually spend $16 million in county option income tax revenue that last year was returned to Indianapolis by the state.

IBJ previously reported the administration later plans to separately ask the council for a fiscal ordinance approving the spending of that money to pay for infrastructure projects, something that Miller said could unnecessarily delay road improvements for the only purpose of making a political statement about the budget not including one-time revenue sources.

He encouraged the mayor to “lay it all out up front” next year.

Scott Kreider, a Republican who voted against the budget, said he was concerned with underfunding of agencies. He said he was “certainly not predisposed to additional appropriations next year outside of public safety.” He also described it as “largely a flat-line budget.”

Discussions over the budget Monday night also were guided by discussions about what to do with spending for the Marion County Sheriff’s Office in the wake of Sheriff John Layton’s decision to halt some of its services, namely that his deputies will stop providing security at hospital rooms for arrestees, stop managing the county jail intake process and stop transporting arrestees to jail.

Those services are expected to be largely picked up by the Indianapolis Metropolitan Police Department, but that shift isn’t reflected in the budget.

That led council minority leader Mike McQuillen to propose zeroing out the sheriff’s budget for next year, which he said would be more fiscally responsible, but he eventually withdrew an amendment after the council’s attorney and others said it would be unworkable due to the budget timelines prescribed by the state and legal concerns.

Hogsett chief of staff Thomas Cook said the sheriff’s office will be audited. And that the administration would be back next year with a plan to revise the spending.

Cook said city leaders "weren’t able to complete an analysis with the most effective and efficient way to do that” within the time constraints imposed by the budget process.
 
The budget also includes funding 86 new police officers and 40 new firefighters, and a $120 million infrastructure plan.

After the vote, Council President Maggie Lewis praised the mayor for “holding the line on spending” and creating a budget that was “lean” and “impactful.”

"I am especially proud of our ongoing efforts to close the structural deficit while presenting our residents with a balanced budget,” Lewis said in a written statement. "Through investments in public safety, offering continuous support for criminal justice reform, providing funding for major infrastructure improvements and creating economic development opportunities, the 2018 budget will create a better city and prepare us for the future."

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