JENNY PETER, Vincennes Sun-Commercial city editor
Rep. Kreg Battles, D-Vincennes, attended Monday night's city council meeting to deliver some bad, yet expected, news.
Battles confirmed to council members and Mayor Al Baldwin that they would need to cut $773,000 - 6 percent - from the city's 2009 budget, and little more than $1.8 million - 12.6 percent - from the 2010 budget as a direct result of House Bill 1001, the property-tax reform plan adopted by the General Assembly last month.
"The news isn't good," Battles told the council members matter-of-factly. "I don't think I have to tell you that you're facing some severe challenges. To say that you'll be forced to make some tough decisions would be an understatement."
Battles voted against the bill and thinks it detrimental to the mostly rural cities and towns he represents. He also has said he believes it won't provide the relief it promises.
"This does not help the counties I represent," he said, adding that rural communities are being hit the hardest. "We'll put money back into people's pockets, but we're also going to take more money out of those pockets."
Council members said residents likely can expect to see city service fees increase across the board as well as the creation of fees that never before existed.
"The days of 60-cent trash stickers are long gone," Councilman Mark Hill said.
As a part of HB 1001, the state's sales tax was increased from 6 to 7 percent, but city officials, as well as Battles, say that does little to make up the shortfall in funding. The county could choose to raise the county option income tax, but the chances of that are slim, Battles said, since county council members would take the political hit.
Knox County faces a $300,000 cut in 2009 and $726,000 in 2010.
"Their shortfall is no where near the range you're going to have," Battles told the city council. "If (the county council) does raise the tax, they'll create a budget surplus. As a county councilman, I wouldn't be interested in creating a surplus fund."
Battles did say the city could appeal to the state Distressed Unit Appeal Board, which is currently being formed. Cities and towns can ask for temporary adjustments to the property tax caps as well as ask that current bond projects be placed outside those caps.
The majority of the Distressed Unit Appeal Board members will be appointed by the governor, a fact that didn't please the city council members, especially Don Kirk.
"They're not going to be sympathetic," he said. "There are going to be an awful lot of hands out at this appeal board, and why would they (pass this bill) just to dole out money through another door?"
Battles said he was disappointed in the General Assembly for passing an 800-plus page bill that few completely understood. He said the bill "created a whole new level of problems," and he also criticized Gov. Mitch Daniels for blaming the state's overspending on local governments.
"This is not a faceless entity," Battles said referring to county, city and local governments. "This is the guy that comes to your door when you need a police officer or the fireman if you have a fire. Your budgets pay those salaries."
Baldwin has said it's inevitable that city services will be reduced as a result of the budget cuts.
Cities, towns and counties - as well as the General Assembly - will be "sifting out the (bill's) nuance" over the next several months in an attempt to better understand its impact, Battles told the council.
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