According to the DLGF website, the department is responsible for, “ensuring property tax assessment and local government budgeting are carried out in accordance with Indiana law.”
DLGF oversight makes sure Indiana towns and cities aren’t risking financial problems by spending more money than they will actually have. The DLGF could make this decision because they predict less revenue than a city actually anticipates. The DLGF could also set a city’s budget at the previous year’s levels if they don’t feel it was submitted in time.
Carmel Mayor Jim Brainard said the cuts for 2015 shouldn’t be a problem because the city anticipates this regular occurrence and often will over-budget. Some items – such as bond payments – are double-budgeted with the expectation that they will be cut.
Brainard said the city double-budgets to protect the city’s tax levy. Cities will set a percentage rate for imposing taxes, called a levy rate, which is then used against assessed value of each homeowner’s property. Carmel set its 2015 tax rate at $0.7007 per $100 of assessed value.
City Councilor Luci Snyder tended to side with the DLGF’s less-optimistic view on excise tax and new permit projections and suggested that the city cut its budget.
Predicting revenue is often about predicting how much a city will grow.
“(DLGF is) super, super conservative for growing counties on a lot of the revenue sources,” Brainard said. “Last year they predicted excise tax revenue at twenty percent of what it actually came in at.”
If Carmel grows faster than DLGF’s predictions, then Brainard said the Carmel City Council can vote to restore the budget and use the extra revenue to fill the holes.
“The cuts are kind of where we expected, so there’s no problem,” he said. “We’ll put some of it back. There’s no reason to think revenues won’t be what we projected.”
City Councilor Eric Seidensticker said he disagrees with Brainard’s practice of double-budgeting revenue sources just to keep the tax rates where they are.
“The State of Indiana allows double budgeting,” he said. “It’s a lie. Every clerk-treasurer knows that it’s a lie. We are falsely raising the necessary revenue we need so we can maximize the tax levy.”
Seidensticker said he expects the budget will be restored “to some level,” but he said it’s important to watch where Brainard might cut from the budget.
