Published: August 29, 2009 10:26 pm         

T-S Editorial: Leaner times ahead for already-thin budgets

Many folks living in Vigo County already understand the meaning of “getting by on less.”

Families here, on average, earn less money than those elsewhere in Indiana and the nation. Our median household income is $37,381 a year, compared to $47,422 for Indiana, and $50,740 for the United States. So frugality is hardly a new concept around Terre Haute.

The coming year, though, will test local residents’ endurance even more intensely for living lean.

As Terre Haute Mayor Duke Bennett put it, “These are unprecedented times.”

City and county government leaders are in the process of finalizing their 2010 budgets. The recently imposed Indiana property tax caps will begin to be fully felt next year, and even more so in 2011. The caps are no longer an election campaign plank; they’re real. Local entities are getting less tax revenue back from the state.

On the county level, the Vigo County Council has trimmed the 2010 budget to $2.5 million less than the 2009 budget. The real effects include leaving four highway department jobs vacant. Another 10 positions in other county departments will not be filled. Changes in the telephone system saved $90,000, and an adjustment in the county’s self-funded health insurance plan will drop that cost by $400,000. Meeting and travel expenses were cut. The council also dropped funding for fuel by 20 percent in hopes the commissioners will then adopt a tight policy on the 21 take-home vehicles unrelated to police and rescue needs.

Of course, even with those scale-backs, the county’s proposed 2010 budget is $74.3 million. But the council deserves credit for getting that total more than $20,000 lower than the state-set maximum on its property-tax levy limit.

People may begin to notice the impact of similar cost cutting by the city of Terre Haute. Its property tax revenue is expected to drop an additional $3.2 million in 2010, on top of the $1.8-million reduction in those funds from the state this year.

No layoffs of city employees are expected, Bennett said. Job vacancies through retirements and turnover likely will go unfilled, though. Sidewalks will get fewer repairs, streets may not be repaved as often and grass in the parks may get mowed less frequently, the mayor explained. The city’s traditional leaf pickup service almost certainly will end after this fall. That ritual costs nearly $300,000 a year in fuel, employee overtime and equipment repairs, Bennett said. Instead, residents will be urged to mulch leaves into their own yard, or bag their leaves for pickup by the Republic trash service.

Though Bennett has built a $5-million Rainy Day Fund, it costs more than $2 million a month just to run city operations, he said.

And that’s not all. In 2011, the property tax caps are expected to shrink Terre Haute’s revenues by another $1 million.

Unless the state comes up with a new “revenue stream” (meaning some sort of tax), or the city experiences economic growth, this brand of leaner living will become the norm. Bennett’s top priority is to maintain police, fire and street services as much as possible.

So far, the priorities reflected in the city and county budget proposals seem prudent.