TIMES UNION REPORTS – Two of Warsaw Common Council’s upcoming meetings will be related to the 2022 budget, and Mayor Joe Thallemer gave the Council some figures to consider Tuesday.
The public hearing on the budget is at 7 p.m. Sept. 20. The adoption date is Oct. 18. The budget has to be approved by the Council by Oct. 31.
“The second thing I wanted to point out was the property tax cap credit estimate. This is showing the amount that will be in the budget but we will not have access to because of property tax caps. So we will be shorted, if you will, $845,570,” he said. “What I wanted to point out there is, it continues to rise.”
In 2020, that figure was $684,290. For 2021, it was $788,611.
“So property tax caps, the credits, continue to impact, in a negative way, our ability to raise revenue through the levy,” he said.
The tax caps were approved as part of the Indiana constitution by voters in 2010. Property owners are entitled to a cap on the amount of property taxes over 1% of the gross assessed value for homestead properties, 2% for other residential and agricultural land and 3% for other real and personal property, according to the state’s website.
“That’s the way it is, but it needs to be understood it’s not a static number. It continues to change,” Thallemer said.
During the budgeting process, he said clerk-treasurers are instructed to assume 90% of the civil and fire territory assessed valuation. For the 2022 proposed budget, the overall city tax rate is $1.47 per $100 of assessed valuation (AV). It was $1.19 last year.
“It’s a conservative way of estimating our rate. I tend to feel it’s important to use the certified 100% because those numbers have already been certified. It’s just that clerk-treasurers are always instructed to use 90% of that number,” he said.
“So if we use the full AV, which was up this year, and just insert that in, instead of 90%, we’re down to $1.32 per $100. So, to me, that would be the realistic rate, up approximately 13 cents from last year.”
He said the city’s AV increased $36.6 million, about 3.3%. However, the Warsaw-Wayne Fire Territory’s AV lost $5 million, a -0.3% decrease. Thallemer said they still can’t figure out how the Fire Territory lost assessed value.
“For that reason, we’re still up overall 3% when we combine city and fire territory. And that has a (positive) impact of about 3.5 cents on the rate,” Thallemer said.
He said the $1.32 rate takes that into account.
Councilwoman Diane Quance asked if the rate was before the Council made any cuts to the 2022 budget, and Thallemer said “exactly.” He said there certainly will be some cuts that need to be done.
Another “very positive impact” Thallemer pointed out was that the city’s health insurance renewal came back last week and it will decrease by 6.2%. He called it “unprecedented” and reminded the Council the departments budgeted for a 12% increase.
“If (Human Resource Director) Jennifer (Whitaker) were here, I’d give her kudos for all the work she’s done, to try to keep our wellness programs going. A lot of it is hard work, good living. But I’m taking 6.2% reduction any day of the week. And those numbers will be a significant reduction in the spending that we’re over right now,” Thallemer said.
He said he feels the cuts the Council will make to the 2022 proposed budget will be over half a million dollars.
“So, if we look at line 1 and line 2 cuts, and try to get down to the levy on the civil side, and we get a little bit below on the fire side, we’re probably looking at somewhere probably north of $1.20, maybe somewhere in the mid-$1.22, $1.23. So about 4 cents higher than last year. I will add that’s still less than what the rate was in 2016,” he explained.
Thallemer also thinks more good news will be coming at the end of the month when Census data is released. He said he received some preliminary indications to where those numbers are, but isn’t going to say anything until it becomes official.
“Our funding for the next decade is going to be based on this 2020 Census. And having that number significantly higher than 2010 is going to be quite the benefit,” Thallemer said. “What that’s also showing is that we’ve got several thousand more citizens to take care of than we did 10 years ago. And that’s really where the pressure is on this budget. We’ll enjoy the benefits of a broader tax base, a growing community, but we’ve got more people to take care of, and that’s really the balancing act of this budget.”
He said while the 2022 tax levy may be a little higher than the 2021 figure, the city was allowed an inflation growth of 4.3%.
“Basically, that 4 cents increase will probably cover that. It’s critical, it’s important to understand that if we continue to take care of more and more services for more and more citizens, larger footprint, we’ve got to be able to take advantage of not only that but by the other things we’ve had to do to be able to continue to provide the services that our citizens deserve,” he stated.
