Indy weighs tax hike as revenue shortfall looms - WDRB 41 Louisville News

Indy weighs tax hike as revenue shortfall looms

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 INDIANAPOLIS (AP) -- Indianapolis officials are keeping a tax increase on the table as they face a $55 million budget shortfall in 2014.

Income-tax revenue has fallen from $297 million in 2008 to $273 million this year. City Controller Jason Dudich tells the Indianapolis Business Journal that the recession and a state decision to withhold money to make up for previous over-distributions hurt the city's coffers. A statewide property tax cap has compounded the issue.

The city has reserves it could tap while waiting for the income-tax stream to improve, but doing so could hurt the city's AAA credit rating.

An income tax hike could be politically challenging. Mayor Greg Ballard ousted Democrat Bart Peterson in part because of voter wrath over tax increases driven largely by public safety needs.

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