The structure of Fort Wayne city finances will be completely reviewed over the next four months by City Council.
The cost to provide the current level of city services is greater than the anticipated revenue in 2014 and beyond.
The administration and City Council, working together in a fiscal policy task force, have researched the fiscal situation extensively over the last year and a half.
The goal has been to understand the present status, implications and possible options.
Unlike the federal government, our city is legally required to balance its budget.
Taxes and cost of city services in Fort Wayne are lower than in most other Indiana cities.
The city property tax levy has been frozen the last two years. The once-large city cash balance has been drawn down to keep taxes low.
Revenue from property taxes has been trending down due to changes in state law with property tax caps.
Because of the declining revenue, street repairs have been cut for several years below needed levels.
Other needs, such as park capital expenditures and a new police academy, have been postponed.
A fundamental choice looms in the 2014 budget.
We can either raise property taxes and/or income taxes to maintain the current level of services or leave taxes at the same level, mandating large cuts in city services.
Balancing with cuts alone would require laying off police officers, cuts in fire department personnel/apparatus, possible closure of some parks, dropping park amenities such as golf courses and continued postponement of maintenance of critical infrastructure such as streets.
If streets deteriorate and quality of life declines, then the value of your home goes down.
Fort Wayne and Allen County have improved to 13th out of 200 metropolitan service areas in job creation in the U.S. Quality of life is one of the prime factors a company considers when choosing a new location.
If quality of life is not maintained, then economic development and job creation will begin to suffer.
There are four main components of this discussion: 1) level and mix of property and local income taxes, 2) city service levels and cost, 3) possible annexations, and 4) Legacy funds.
How these four variables will be changed over the next several months will determine the level of services that can be provided and how they are paid for.
Fort Wayne city property and income taxes have been kept below the allowable Indiana state levels for many years.
To allow cities to adjust to the decreased revenue level when the property tax caps were put in place, the Indiana state legislature made new local option income taxes possible.
The local option income tax rate of 1 percent in Allen County is the lowest of all 10 counties in northeast Indiana. LOIT in Indianapolis is 1.62 percent; South Bend, 1.75 percent; Anderson, 1.75 percent; and Elkhart, 1.5 percent.
The complex relationship of these different possible taxes will be examined to determine the best level and mix. Some of the new local option income taxes give property tax relief by reducing property taxes to citizens below the property tax cap.
City services will be reviewed to eliminate or pare down any non-essential services. The costs of providing essential services will be reduced as much as possible with review of staffing levels and city employee benefits.
Several areas surrounding Fort Wayne will be reviewed for possible annexation. If the city can provide services in these areas with existing staff and economy of scale, this would be a net gain for the city budget.
Legacy funds have been primarily targeted for new, transformational projects. However, in a tough economy with all citizens struggling to make ends meet, it is reasonable to consider using a portion of these funds for needed city expenses to keep taxes manageable for taxpayers.
City Council would like to hear citizens’ input on these possibilities. These are important decisions that will set the course of Fort Wayne for many years. City Council may be contacted by emailing the City Council administrator at firstname.lastname@example.org or calling 260-427-1445.