East Chicago government making do with less

BY STEVE ZABROSKI, Times of Northwest Indiana Correspondent

EAST CHICAGO | Despite a state-mandated loss of $18 million in property tax receipts, the city will carry on next year through across-the-board cuts, increased revenue and a greater reliance on casino funding.

Every department will have to make do with less in the preliminary 2009 budget presented to the City Council last week, some with a lot less.

With tax levies frozen at 2007 levels by the Legislature, and the city's 2008 budget approved by state regulators only last week, the proposed $41 million budget for next year is still tentative, said financial adviser James Bennett.

"We won't know until we see how the state's going to react to this," Bennett said.

The Park Department will have some $2 million less to work with next year, but every division from the mayor's office to the city garage is facing a reduction in available funding -- except police and firefighter personnel.

 "The administration considers public safety a priority," Bennett said, so $5 million in gaming revenue will be shifted to the department budgets to cover losses in property tax money.

The city also already has collected $300,000 from a new city ordinance which charges insurance companies for ambulance calls, Bennett said, and is negotiating with the School City of East Chicago to share in the $500,000 per year cost of school crossing guards.

The 75 employee positions eliminated this year through layoffs and early retirement are now permanent, Bennett said, and a second round of layoffs may be required "as a last resort."

The budget is still under review, he said. There might be recommendations for further reductions before the council meets Nov. 24 for its final adoption.

Council members just received their copies of the budget on Wednesday, and the finance committee has not yet had time to discuss it, said Christine Vasquez, D-4th, the committee chair. But the committee will have a meeting before the final vote, she said.

If Lake County were to approve a 1 percent income tax as recommended by state legislators, property levies would be unfrozen and East Chicago would see an additional $6 million to $7 million in revenues, Bennett said.