DALLAS -- The Indianapolis City-County Council approved a $1.1 billion budget for fiscal 2017 that includes a $200 million infrastructure plan that would be partially funded by future bonding.
City-county councilors approved the budget in an 18-to-7 vote Monday.
The budget spends about 1% less on city services compared to the fiscal 2016 budget.
Mayor Joe Hogsett said in a written statement that he was thankful for the bipartisan support for the budget proposal that accomplishes "more with less."
The budget will reduce the city's structural budget deficit to about $23 million. It spends $8 million more on public safety than last year but holds the line or reduces spending in other departments.
"As a result of this vote, Indianapolis will recruit 86 new police officers, increase city support for crime prevention programming, and make substantial investments in our neighborhoods," Hogsett said. "Most importantly, we will do all of this while cutting the budget, reducing the structural deficit and protecting our rainy day fund – without asking for one dime more from Indianapolis taxpayers."
The budget calls for spending $50 million in each of the next four years on the county's infrastructure projects.
At the center of concern for some councilors is that the budget is not completely funded and relies on future bonding of $75 million to pay for roads, parks and public safety projects and equipment.
Republicans have proposed reducing the future bond requirement by spending $20 million in reserve cash for road funding immediately but Hogsett's administration wants to hold the cash in a rainy day fund.
Although Monday's vote does not authorize the city to issue the bonds, it gives the council the option to do so in the future.
Administration officials said the debt wouldn't require any new taxes. Instead, it would extend existing tax levies earmarked for debt payments. A series of bonds from 2007 will be paid off over the next two years, freeing up $8.7 million in annual revenue that could be used for new debt service.
Republican councilman Aaron Freeman, who voted no on the budget proposal, said that proposal to fund projects with future bonding was neither "frugal or prudent and it's not doing the people's business in a upfront way."
Republican Councilor Jeff Miller commended the budget for its flexible funding approach that created money for projects that does not currently exist in the operations budget. Miller also noted that the bonding proposed is on top of the local funding and federal match funds for infrastructure.
"The bonds that we are going to be discussing in addition and it's similar to when we bonded in other years for infrastructure," said Miller.
City-county councilors also approved on Monday night the $71 million 2017 budget for the Indianapolis Public Transportation Corp., also known as IndyGo, in a 21 to 4 vote.
The budget approval comes after uncertainty over how IndyGo's major transportation upgrades would be funded if voters reject an upcoming referendum on the November ballot to pay higher income taxes for expanded public transportation services.
Freeman, who voted no to the budget, said he was concerned that the budget sets the county up for fiscal crisis should the referendum fail. "It's putting the cart before the horse and it's better to go to last year's budget and do additional appropriation if needed," said Freeman.
The referendum, if passed, would raise approximately $56 million annually to expand bus services throughout Indianapolis. As part of the expansion, IndyGo plans to build the Red Line bus rapid transit line from Broad Ripple to downtown to the University of Indianapolis. IndyGo has put a price tag on upgrades and the expansion of $390 million funded through a mix of local and federal funds and borrowing.
Mike Terry, CEO and president of IndyGo, who spoke at Monday's council meeting, said the referendum has no impact on the 2017 budget. Terry said that IndyGo could maintain its current service in 2017 regardless of the referendum's outcome.
"The red line would not be operational until late 2018 at the earliest so there would be no change to services we are offering currently," said Terry.
Republican Councilor Colleen Fanning said that not passing the budget "would be fairly irresponsible and it would result in about 25% loss of funding which would result in some kind of service cuts."
