HAMMOND -- Environmental fines, not tax dollars, now will have to fund the city's Environmental Department, Mayor Thomas McDermott Jr. announced Thursday after eliminating the department from city government -- the fifth department he's abolished in five years.

In a cost-cutting move intended to offset property tax losses next year, McDermott said he will pull the agency's $200,000 budget from the General Fund budget and cut one of the department's 10 positions.

"We've got difficult decisions, but this is a good business decision for Hammond," McDermott said. "We have a lot more cuts to make."

The city faces a $1.3 million decline in property tax revenue this year, and a projected $9 million decrease next year -- largely due to a state-mandated cap on property tax rates.

McDermott last year shuttered the city Health Department and a year earlier closed the Sealer's office, cutting the city budget and shifting the duties of those departments to state and county agencies.

He previously created a user fee structure to fund trash pickup and recycling and merged the Animal Control and Emergency Management departments with the Police Department to cut costs.

Closing the Health Department, which McDermott said would save the city nearly $1 million a year, was a flashpoint in his 2007 re-election battle. Battering McDermott on the issue, Republican challenger George Janiec's bare-bones campaign came within 600 votes of toppling the incumbent.

In a news release Thursday, McDermott said he had cut 16 jobs from the city payroll this year and 138 have been slashed since he took office in 2005.

He also took credit for funding the city's self-insurance fund in the 2009 budget.

McDermott said more departments will face cuts and closure, with the city bus service a likely casualty of tax cap-related trimming.

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