PLYMOUTH — In a special session on Monday, the Plymouth City Council heard from Eric Walsh of Baker-Tilly with a city-wide economic analysis.
Walsh reported the good news: due to good management and conservative fiscal strategy, the city is in “very healthy” financial shape.
He then went on to advise caution in the coming years, based on the Indiana Assembly’s passage of SB1 in their last session, saying that some “hard decisions” may be on the horizon.
While the property tax caps in the bill — phased in over the next six years — will have a negligible effect on city finances in the short run, according to Walsh, by 2027, it could cause problems. While there is no way to come up with exact numbers for the future, lost tax revenue caused by the tax caps imposed by the legislature’s bill could cause significant enough shortfalls for the city to have to consider other revenue possibilities to make ends meet.
Walsh said that while road repair money will still be available from the Community Crossings Matching grants, the bill will give a larger sum of money to those communities that have already instituted a wheel tax. The bill also allows cities the size of Plymouth to adopt their own income tax of up to 1.2 percent. Plymouth currently has neither of those taxes.
Walsh said that the legislature would likely take no action to fix the local shortfalls caused by the bill, but the bill had given Indiana’s cities and towns “the tools to take the heat and fix it locally” with added local taxes.
He said the places the budget would be toughest were in personnel and in capital projects, including city vehicles and police cars.
Walsh said that the city’s TIF money would be a way of easing the capital projects money crunch when it came to building projects, but some hard decisions might be necessary regarding hiring any additional personnel or replacing vacated positions.
While the city is in very sound financial shape, Walsh encouraged discussions to have a proactive approach to what might be on the horizon in 2027.
The board accepted Walsh’s report and voted to have those discussions moving forward.
