Commentary by Jeff Papa
The Town of Zionsville is currently in the process of adopting a budget for 2014. Citizens may view the budget proposal at www.zionsville-in.gov. The town council has conducted two public budget work sessions, during which each section of the budget proposal was detailed and discussed, as well as a public hearing on the proposal. The next step in the process is the meeting at 7 p.m. Oct. 28 at Town Hall, where the council will consider adopting the budget.
In 2009, the state imposed caps on property taxes of a maximum 1 percent of assessed value on residential property, 2 percent on agricultural and apartments and 3 percent on commercial properties. This has saved taxpayers a great deal of money, but also impacted Zionsville’s revenues significantly. Zionsville is over 90 percent residential, the highest proportion of 1 percent-capped properties in Indiana. Fortunately, staff and past town councils did an excellent job of saving excess revenues, and the town was able to weather the first few years of this revenue loss.
The town staff and council worked to reduce spending to the point where any additional cuts would have resulted in a loss of police or firefighters or a reduction in basic services – something we were not willing to do – and worked to find ways to diversify our tax base, including the attraction of appropriate commercial development. The 2012 budget showed approximately a $500,000 deficit on paper, but that year ended almost even due to tight fiscal discipline in the actual spending that occurred. The current (2013) year appears to be on track for a similar result; a deficit on paper but approximately even through spending restraint. One additional reason this was possible is the high level of cooperation between the town and Zionsville Community Schools; sharing costs, joint bulk purchase orders, sharing equipment and general cooperation have resulted in significant savings for both.
Continuing this spending restraint while working to improve the tax base, the council directed staff to produce a 2014 budget proposal which flatlined expenditures from 2013, with the exception of an unavoidable increase of around 7 percent in insurance costs, and a 1.5 percent performance-based salary increase component for staff (who have gone without raises for two years). With revenues projected to increase around $700,000 in 2014, the budget proposal for next year is balanced and even shows a small surplus. If we continue our focus on efficiency, that may even result in a significant amount saved. These funds could be used for needed projects that have been delayed. While some projects have been delayed, it is important to note that we have accomplished balancing the budget without negatively impacting the day-to-day services provided to the community.
The key benefit to the state tax caps is that a homestead owner cannot be asked to pay more than 1 percent of the assessed value of his or her home in property taxes (without a referendum). Once the combined property tax rates (school, library, county, town) reach that 1 percent level on a given home, that is the maximum amount. According to information provided by the ZCS school board, homes in Zionsville assessed at a value of about $137,673 or more would already be at the maximum in 2014. This means that for those homeowners at the tax cap or above, a change in the budget has little effect, if any, on their tax bill.
The town council and staff will continue to use tax dollars carefully, work to diversify the tax base in appropriate ways, and plan for needed repairs and improvements. Please let us know if you have thoughts on the budget, either by contacting us directly or by attending the budget meeting on Oct. 28.