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Mayor warns of looming budget shortfall

March 25, 2011

COLUMBIA CITY — Columbia City Mayor Jim Fleck addressed the town’s Common Council on Tuesday and warned the five-person panel that the city could see another financial hit coming in the next year or more.
Fleck reported at the tail end of the board’s regular session that he’d attended a conference with other Indiana mayors and received word regarding an “over-distribution” to local governments across the state of about $660 million.
“In effect, they (the state of Indiana) gave us a loan. It’s not anybody’s fault,” Fleck said, “it's the fault of the system and the recession.”
Fleck explained that the state issues revenue to local municipalities based on previous tax revenues.
“Our distributions are two years after we collect taxes,” he said.
Since Columbia City is currently operating with a surplus, Fleck said, “it looks as though we’re going to be fine.
“But next year when we get 2010’s certification, the expectation is we will have a shortfall.”
Fleck went on to explain that now is the time for the city to prepare for that expected dip in revenue.
“What they’re telling us now is that while we have this excess, we’re to bank it,” he said.
“This may only be a one- year blip, but it will be a severe blip. It will work itself out.”

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