Hogsett says higher taxes are on the table for city budget

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

INDIANAPOLIS, Ind. (Jan. 4, 2016)-- On his first Monday on the job, Mayor Joe Hogsett has had time to decorate his 25th floor office at the City County Building with sketches of Robert and John Kennedy, Dr. Martin Luther King, Jr., and General George S. Patton.

He may need that compassionate tough love to wrap his arms around a $1.2 billion city budget that might require “revenue enhancements” to be balanced in the years to come.

“Well, they would not be my default position as a first resort,” said Hogsett in his first sit-down television interview after being sworn in on New Years Day. “I mean, clearly adding to the tax burdens of the people of Indianapolis would be something that would come only if all other avenues had been exhausted, but again, to re-emphasize, everything is on the table because the long term financial stability of our city is at stake.”

Outgoing Mayor Greg Ballard left Hogsett with a fully funded 2016 budget that exhausted revenue options that have kept the city’s spending plan in the black.

“Over the last three or four years, in order to get a budget passed, there was compromise between the republican administration and the democratic counselors,” said Councilman Jack Sandlin, a southside republican, “and part of that compromise was spending down fund balances to the point where we don’t have fund balances to spend down anymore, so we’re going to have to take a real hard look at what we’re spending money on.”

Ballard also relied on the sale of the city’s water company and parking meter franchise to raise operational and capital spending funds.

“I think the accounting of the past is no longer applicable to today,” said Hogsett. “I think the one-time sale of city assets has allowed previous administrations to balance the budget but I don’t see many assets that are still available to take advantage of those one-time revenue enhancements.”

Hogsett and Sandlin, who embraced warmly during swearing in ceremonies at the Hilbert Circle Theater on January 1, agree that more efficiencies will need to be rung out of city government while the administration considers budgeting and revenue raising options.

“Some of that may be delayed spending,” said Sandlin, “things that are coming down the road that you wouldn’t necessarily spend money on right now that you would kick the can, if you will, down the road.”

One of those issues was the scrapping of Ballard’s $500,000 criminal justice center proposal which still cost the city $12 million in reimbursements to developers who put forth unsuccessful plans.

“I think a new jail is going to be necessary,” said Hogsett, “the planning of which is already beginning and we’re going to have to articulate a vision for a new jail this year. I would look forward to the prosecutor and the sheriff’s involvement in those discussions along with our police chief but I think that needs to be done this year.”

Hogsett said he would take a more conservative approach to the granting of Tax Increment Financing status to developers, especially those who benefitted from the Ballard administration’s granting of tax breaks or deferrals to encourage building of residential, retail or office space downtown.

The mayor is hopeful there are no unforeseen spending commitments awaiting him.

In December, during Ballard’s final weeks in office, Public Safety Director Dr. David Wantz pulled the plug on a failed $10 million public safety communications system upgrade called Interact.

To resolve the fiasco, Wantz requested an unbudgeted $6 million bail out to engage the city’s current provider to continue police and fire communications.

Wantz, who is expected to continue in his job at least through January as the new administration considers the future of Public Safety and the director’s role, said the city controller assured him the funds could be found.

As Hogsett begins work on the 2017 budget this spring, he will face the prospect of negotiating police, fire and city employee contracts in the coming year.

“The fact that all of those contracts will be negotiated this year has advantages and disadvantages,” he said. “The advantages are that you get all of the city employee compensation packages and benefits packages at least discernable for three or four year period. The disadvantages are that they come at the same time at a time when the city is not particularly well suited to be making significant increases in those compensation packages. The fact that all three of those contracts will be negotiated this year will put us in a position at the end of the year to know much more discernably what the next three to four years after that will bring.”

Hogsett said he expects his staff to present him with an analysis of the city’s accounts next month to be followed by the announcement of a long term fiscal stability plan within ninety days.