The Herald Bulletin

Morning Update

Annual Report: Health & Public Service

March 29, 2010

Local governments struggle with budget cuts

Cities, towns lay off workers, slash services

ANDERSON, Ind. — The recent economic recession, statewide property tax caps and a delayed property tax collection schedule combined in 2009 to create a budget nightmare for municipalities all over the state.

In Madison County, some local governments had to take drastic measures to balance their books, including laying off workers and transferring the costs of services to their citizens. Other municipalities have so far been able to escape the budget crunch relatively unscathed.

In Anderson, city officials had to cut millions from the city’s budget after an independent study concluded that property tax caps would have a greater effect on the city’s finances than originally thought. The result was the institution of a trash pick-up fee for residents and the elimination of 72 positions.

“The whole issue dominated local governments in 2009,” Anderson Deputy Mayor Greg Graham said. “With caps being lowered, it will still be a huge issue for local governments this year.”

Graham said Anderson’s drastic measures were necessary to balance the budget.

“If we hadn’t taken the strong measures we’d be in worse shape,” he said. “We’ll get through it, but it won’t be without its challenges again this year.”

Compounding the problem is the property tax collection process, which has been delayed for the last few years. Cities, towns and the county don’t know how much money they have to work with for a year until they see how many residents pay their property taxes.

“It’s very hard to run a business as big as this without knowing how much money you have,” Graham said.

The county government has been hit hard by budget cuts in recent months as well. In November, after several heated meetings between the County Council and county employees, the council mandated that all employees paid through the general fund take a four-day furlough by the end of 2009. The measure was aimed at helping the council cut $280,000 from its 2009 budget.

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Annual Report: Health & Public Service
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