By Carla Knapp, Pharos-Tribune associate editor

carla.knapp@pharostribune.com

For months, Mayor Mike Fincher has been hearing estimates from state government officials about the impact property tax caps could have on Logansport's income.

The figures ranged from a half million on the low end to $2.1 million on the high end.

It seems the higher estimates were more realistic.

Fincher has now received confirmation from the Legal Services Agency of the Department of Local Government Finance that Logansport will lose more than $2 million in property tax revenues by 2010.

The property tax caps will begin in 2009 at 1.5 percent for homes, 2.5 percent for rental and agricultural properties and 3 percent for all other real property. That will mean $1,076,124 in revenue losses for Logansport that year.

By 2010, those caps will be at 1 percent for homes and 2 percent for rentals and agricultural properties, which will equal another $944,580 in losses for the city.

Although Fincher said these figures are still not set in stone, city officials will use them to begin considering the cuts that need to be made for this year's budget process.

"They used words like 'estimates,'" Fincher said of the correspondence he received from Legal Services Agency. "Really, it's hard to tell if these are dyed in wool figures or not, but those are the figures we're going to use."

Last year, the city approved a budget for the 2008 fiscal year of $11.7 million from the general fund, which includes each of the city's departments, and $15 million for all funds, which includes general as well as pensions, MVH, CEDIT and other funds. Compared to those budget figures, the revenue losses would represent about 13.4 percent of the city's overall budget or 17.3 percent of Logansport's general fund.

The news for city governments isn't all bad, though, as the state announced that it will take over pensions and other funds to ease the burden felt by cities and counties.

Still, Fincher said that other cities will not see the impact from the cuts that Logansport is bracing for.

"Some counties are losing relatively nothing while others are losing more," he said. "... There's no consistency to it."

Others areas that will be hit hard include Elkhart and St. Joseph counties.

The discrepancy deals with the property taxes already being assessed in those areas. Cass County has the fourth-highest property taxes in the state; however, the city's spending makes up just 18.2 percent of the property tax bills. Fincher said the high tax rate has been in spite of efforts by city government to keep spending down.

"It's because our tax rate is too high and we're spending too much, but I find that difficult to believe since we haven't increased our operating budget since I've been mayor, and last year the city council removed things from the budget that made it even less," Fincher said.

Now more certain about the losses Logansport can expect, Fincher has begun working with members of the city council on proposed spending cuts and other ways to bridge the budget gap. Proposals range from charging for trash pickup to eliminating services like yard waste collection, from implementing new taxes like the Local Option Income Tax to reducing personnel.

Fincher noted that these proposals are only in the talking stages right now and no decisions have been made.

"They are ideas and ways to reduce spending," he said. "... For every action, there's a reaction, so it will be very important that the council sit down and talk about these ideas."

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