Lafayette approves $82 million 2023 budget; includes tax cuts
LAFAYETTE, Ind. — On Thursday, the Lafayette City Council approved next year’s budget, set at $82,562,067 for the 2023 fiscal year.
The budget saw about a $7 million increase compared to the 2022 fiscal budget, which was around $75 million.
Much of the increased cost in the approved budget was due to the city offering raises to employee wages, as well as the need to keep up with material costs that have gone up over the past year due to the significant rise in inflation.
On top of wage increases for city employees, Lafayette Mayor Tony Roswarski announced that the city will be cutting taxes slightly in the upcoming fiscal year.
Budget for the upcoming 2023 fiscal year
Within the budget, about $46 million was allocated to the city’s general fund, which covers expenses for city employees, city facilities, sanitation for the city, animal control and the fire and police departments. Notably, around $39 million of the general fund will be going to fund both the fire department ($18.1 million) and the police department ($21.7 million). This is about a $2 million increase compared to last year’s budget.
In addition to the general fund, the city has allocated around $7.05 million to cover the expenses of the motor vehicle department, traffic department and fleet maintenance department.
Around $5.6 million is slated for Parks and Recreation administration, park maintenance and the Columbian Park Zoo. Around $1.17 million has been budgeted to pay for road and street expenses and around $3.6 million on public safety expenses.
Other amounts budgeted include: around $596,000 on redevelopment; $115,000 on police continuing education; $25,000 on the band fund; around $924,000 on park bonds expenses; $161,000 on the cumulative capital improvement fund; $2,050,000 on the cumulative capital development fund; around $544,000 on the parking operations funds; around $2.2 million on fire pensions; and $1.8 million on police pensions. The city budget also includes $10.2 million in economic development income tax funds.
The mayor also introduced three additional ordinances that would increase the salaries of city employees in the next fiscal year, which were approved by the city council.
The first, Ordinance No. 2022-36, would increase the salary of all appointed officials and employees of the City of Lafayette by 5% for the 2022-23 fiscal year. Law enforcement and the fire department were excluded from this proposal.
The second, Ordinance No. 2022-37, is a continuation of Ordinance 2021-54, which created fixed salaries related to the four-year contracts that the city made with the law enforcement and fire department unions, where the city agreed to guarantee annual pay raises. Initially, the ordinance only required the city to offer law enforcement and fire department employees a 2% increase in pay. However, like last year, after reviewing its finances, the city has determined that it can offer police and fire employees a 3% raise.
The third ordinance, Ordinance No. 2022-38, would increase the salary of all elected officials by 5% in the 2023 fiscal year. This would affect salaries for the mayor, city clerk and all nine city council members.
Reduced taxes in 2023
At the October meeting, Roswarski and City Controller Jeremy Diehl announced that residents of the city will see a small decrease in taxes in the upcoming fiscal year.
This in large part is due to an unexpected increase in revenue from property taxes in 2022, which were significantly higher than the city initially expected to receive.
Currently, the effective tax rate is around 1.1526 percent; starting next year, taxes will be around 1.12552 percent, or around a 0.03 percent decrease.
“We’re in a healthy economy, assessed values have outpaced our levy growth quotation, so we expect that benefit to translate down to the tax-payer level in the form of reduced rates,” Diehl said. “At the same time, we’ve got a provision of adequate funds to support city services.”
“Firstly, government budgets must be supported by resources. Those resources can be in the form of cash reserves, miscellaneous revenues (income tax, excise tax, licenses & fees, charges for services, etc.) grants, and property taxes,” Diehl said.
“The budget process concerns determining our spending needs, then identifying other revenues to satisfy the spending needs, then calculating a tax levy to make up the shortfall, so long as the levy falls within the restrictions of levy growth for tax-supported funds.”
In an email response to the J&C, Diehl explained why the city was able to reduce taxes in the upcoming fiscal year in more depth.
“The year-over-year growth of a governmental unit’s total tax levy is limited by the levy growth quotient (LGQ), which is based on a rolling 6-year average of Indiana non-farm payrolls.
“This LGQ is designed to prevents taxes from growing faster than average wages and the population’s ability to pay. The mayor mentioned that the LGQ for 2023 is 5%. The mayor also indicated that net assessed values (NAV) of property within the City have grown nicely, at about 7.5%. When NAV growth outpaces the LGQ, the tax rates will generally decrease. Conversely, when the LGQ grows faster than NAVs, tax rates will rise.”
This article originally appeared on Lafayette Journal & Courier: Lafayette approves $82 million 2023 budget; includes tax cuts
