GOSHEN — The city’s 2020 budget has officially been passed on first reading, with a second and final reading set for later this month.
A total of just under $48 million in budget requests from across all funds were presented to the Goshen City Council for review Tuesday, up from the $45 million approved by the council for the city’s 2019 budget. The council will hold its final reading of the 2020 budget during its upcoming Oct. 22 meeting.
A breakdown of the budget’s top funds, known as the “Big Four,” as compared to the 2019 budget is as follows:
- General Fund: $22.6 million, up from the $20.5 million approved for 2019
- Motor Vehicle Highway: $3.6 million, up from the $2.7 million approved for 2019
- Parks and Recreation: $2.6 million, up from the $2.5 million approved for 2019
- Public Safety LOIT: $2.3 million, up from the $1.1 million approved for 2019
According to accounting firm Baker Tilly, who handles budgetary oversight for the city, the 2020 budget’s “Big Four” account for approximately 93% of the city’s payroll and benefits, 98% of supplies purchased for the city, 62% of services and charges, and 52% of the city’s capital budget.
TIME TO SPEND
While building the city’s cash balances has been a top priority during past budgetary discussions, Goshen Mayor Jeremy Stutsman noted Tuesday that he chose to focus less on that aspect of the 2020 budget given the success the city has had with saving money in recent years.
“The Department of Local Government Finance suggests communities have cash on hand to cover a minimum of two months of operations and a maximum of six months. We will end 2019 with over six months of cash balances,” Stutsman said. “Our job is to be good stewards of the tax dollars and find ways for these dollars to be put to the best use and return for our community. This includes preparing for the future by building our savings accounts to a healthy level. It also includes making sure we aren’t saving more money than is necessary. We must find that balance of spending and saving.”
While intent on keeping the city’s spending at or below 95 percent of the total budgeted amount, as has been done in past years, Stutsman said he believes it is time for the city to utilize more of its yearly budget to better the community, rather than just saving money for saving’s sake.
“It is for this reason that I am suggesting we pass a funded budget, but not a balanced budget for 2020,” Stutsman told the council. “The 2020 budget is presented to you with the knowledge that cash balances will be tapped, but not depleted. I would not be suggesting that we move forward with a funded budget if we hadn’t prepared for this over the last several years. If you recall, I have committed each year that there will come a point when it is appropriate to spend more and other times where we will need to pull back on spending.”
In a related matter, Stutsman noted that, like the city’s 2019 budget, the 2020 budget again does not include a $500,000 appropriation from the city’s Rainy Day Fund, as it had for several years prior to the 2019 budget’s adoption.
“Starting in 2014, the city has chosen to appropriate $500,000 of the Rainy Day Fund to help cover possible income shortfalls. This was done because we were still learning the effects of property tax caps and concerned about income estimates,” Stutsman said. “Due to the hard work of many involved, this $500,000 was not touched in 2014, 2015, 2016, 2017 or 2018.”
PROPERTY TAX CAPS
The state’s property tax caps — commonly referred to as “circuit breakers” — were created with the goal of preventing local governments from overtaxing property owners based on flawed assessments.
Originally passed into law in 2008, the caps were amended into the state constitution in 2010 after a statewide public vote resulted in more than 70 percent of voters favoring the measure.
Starting with 2010 tax bills, property owners’ taxes in Indiana have been capped at 1% of gross valuation for homesteads, 2% for residential properties, agricultural land and long-term care facilities, and 3% for nonresidential properties and personal property.
According to Stutsman, the city has absorbed over $32 million in lost revenue due to the circuit breakers since their implementation in 2008, with another $2.8 million in losses expected for 2020.
However, Stutsman did note that the annual circuit breaker losses are becoming more predictable with each passing year. At the same time, those losses also appear to be lessening each year as the city’s assessed value increases, he explained.
“Our net assessed value is still increasing. The 2019 value is $1,196,721,654, which is still lower than our value in 2007, which was $1,291,864,430,” Stutsman said. “In 2020, we are expecting to see our net assessed value to finally surpass the value we had in 2007. It has taken our net assessed value 13 years to recover from the economic downturn. It is important to remember we survived this time with much lower cash balances than we currently have.”
THE BUDGET
According to Stutsman, a majority of the proposed funding increases included in the 2020 budget are due to a 2.5% raise in wages for city employees and the rising cost of health insurance.
“We were successful in adding staff in 2017 and 2018. No staff was added in 2019. This budget does include a request for additional staffing in Central Garage, the Street Department and the Police Department. Each of these departments is requesting one additional staff member for 2020,” Stutsman told the council. “These numbers have been included in the 2020 budget, but I have informed the departments that I want to hold off on hiring of any new positions until we have our budget approval from the state and have a better feel for our actual income in early spring.”
Additionally, the 2020 budget also includes $525,529 earmarked for the establishment and operation of the city’s new Department of Environmental Resilience, which Stutsman had proposed earlier this year as a way to organize and promote various green initiatives and efficiencies within the city, such as plans for carbon neutrality by 2035 and the establishment of a 45% urban tree canopy by 2045.
Council members officially approved the creation of the new department back in September.
“Overall, I feel good about this coming year’s budget and will work hard to respect and watch the additional dollars being requested,” Stutsman said in concluding his comments on the proposed budget. “We need to do whatever we can to take care of the great employees that serve this community, all while protecting the interests of all of our residents and the future of our youth.”
With the final, second reading of the 2020 budget set for the council’s Oct. 22 meeting, Stutsman encouraged all council members who have questions, concerns or suggested changes to the proposed budget to contact him in the days prior to the second reading in order to ensure all voices are heard and issues addressed prior to the final vote.
“If you have questions or changes, I’d ask that you contact me, and we’ll bring in the appropriate department head, we will make ourselves available to council members over the next few weeks here to answer any questions,” Stutsman said. “All I ask from council members is, please get with us ahead of time, and make sure if you’ve got a cut that you’re going to suggest, that you know the results of that cut. Some of them aren’t as simple as they may appear. So please, please take me up on my offer. We will make ourselves available.”
The Goshen News
John Kline
10/02/2019