South Bend property owners will pay $21.3 million less in property taxes annually by 2010 as a result of reforms through House Enrolled Act 1001, according to the latest analysis conducted on behalf of the City of South Bend.

But as city officials begin presenting a spending plan for 2009 and 2010 today to the South Bend Common Council, the impact of those tax credits for property owners will become clear. The mayor and controller asked department heads to make their best recommendations for how to meet lower funding levels.

The City of South Bend will cut 53 firefighters and 40 police officers over the next two years, while closing a host of park facilities and recreation programs that recently earned the city national accreditation, according to the spending plan.

The City faces projected annual revenue losses of $18.2 million to the city's general fund and parks fund, and another $3.1 million to its Tax Increment Financing districts, which fund economic-development initiatives. Those amounts are higher than original projections by the Legislative Services Agency upon passage of the 1, 2, and 3 percent property tax caps plan championed by Gov. Mitch Daniels.

Over the next two budget years, the City will cut more than 200 personnel across the board – about 15 percent of staff. The proposed cuts are in addition to the 7 percent citywide reduction of 95 staff, which already has occurred between 2000 and 2008 through efficiencies and greater reliance on technology. Nearly 79 percent of expenditures citywide are for personnel.

At a time when higher gas prices are leading more residents to consider "staycations" they will find far fewer amenities for which to stay. According to the spending plan, the City of South Bend, by 2010, will close:

• All city pools. (They'll close one day per week beginning in 2009.)
• All summer playground sites. (Half will close in 2009.)
• Howard Park Ice Rink.
• Howard Park Senior Center.
• Studebaker Golf Course.
• Rum Village Nature Center.
• The city's greenhouse and conservatories.
• The Martin Luther King Jr. and Charles Black Sr. recreation centers.
• Summer track and junior baseball programs.
• Public rafting at the city's distinctive East Race Waterway.

Potawatomi Zoo will remain open – unless officials choose to close the state's oldest zoo in order to restore a few of the park programs already on the chopping block. The park department also will reduce maintenance on the fountain at the Morris Performing Arts Center as well as eliminate one tree crew and all but one park police officer.

"Our taxes pay for important services at the local level – public safety, good neighborhoods, economic development, parks and public infrastructure. All of these impact quality of life and help make our community a great place to live," said Mayor Stephen J. Luecke. "This budget is going to present some challenges and some change. I've worked with department heads to alleviate the amount of pain these cuts will have on our residents, but there's no avoiding the impact of these funding changes by the governor and the Legislature. For many residents, these proposed cuts will mean the loss of services they use on a daily basis."

City support will end for social programs and several mayoral initiatives, including the Commercial Corridor program, which has enhanced the city's primary entryways; after-school programs and initiatives for Healthy Communities and Workforce Diversity.

Public safety (Police, Fire and the 911 Communications Center) accounts for 75 percent of the city's general fund expenditures, which rely heavily on property taxes. Yet the proposed $8 million in public-safety cuts in the spending plan is less than half of the total annual cuts by 2010.

Programs that encourage residents to share 50-50 in the cost of improvements will end for new curbs and sidewalks. The city's lamppost and historic streetlight efforts also will be cut. This overview of cuts does not account for the impact of the tax caps on revenue in the city's Tax Increment Financing districts.

"As we begin budget hearings with the Council, we are taking a multi-pronged approach to address revenue shortfalls as a result of the state's new property-tax system. We first are looking to find new efficiencies and ways to consolidate existing services before looking at reductions in services and personnel," Luecke said. "In addition, we will continue to invest in development efforts to grow our local economic base by bringing additional private investment – both jobs and assessed valuation. Finally, we will explore new revenue options, including grants and fees. Regrettably, the only option the state has offered is to increase local income taxes."

St. Joseph County's local option income tax rate of 0.80 percent is now the 10th lowest of the state's 92 counties, while neighboring Elkhart County has a rate that's nearly double at 1.5 percent.

For three years, Luecke has been a leader in a bipartisan coalition of mayors across the state through the Indiana Association of Cities and Towns in lobbying the legislature. IACT has proposed that the legislature give communities an array of potential revenue sources, enabling each community to choose the taxes that best fit its context.

"The spending plans we are presenting during budget hearings do not propose any new taxes. Clearly, there will be some things that we can no longer afford to do," Luecke said. "We are faced with the choice of severely cutting services or finding ways to adequately fund them."

The Common Council's budget hearing schedule includes review today of budgets for the Parks & Recreation, Code Enforcement (and Animal Control), and Community and Economic Development department budgets. The Council will review budgets for Public Works on Wednesday, followed on July 30 with examinations of budgets for the Building department, the Mayor's Office, Legal Department, City Clerk, Century Center and the Administration & Finance department with the Human Rights Office. After reviewing budgets Aug. 4 for Capital, Debt and Self-Insurance funds as well as its own budget, the Common Council concludes Aug. 6 with the Morris Performing Arts Center, and the Police and Fire departments.