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Conflicting Property Tax Estimates Leave Columbus in Dark

Columbus is already formulating its budget for 2010, more than six months before the city council will first consider it. But Mayor Fred Armstrong said the city must find a way to fund city expenses despite the potential loss of millions of revenue dollars from new property tax caps passed by last year’s General Assembly.

Last month, the Legislative Services Agency (LSA) released estimates for how property tax caps will affect each city and county in the state. As to the confidence Armstrong places in the LSA’s estimates:

“None. I just don’t put any into it. It’s an estimate. That’s what it is. They’re going to give you what they feel is correct,” he said. “Last year, we got an estimate of $18,000 that we’re going to lose. Then it went up to $100,000. Then it went up to $833,000. Then it went up to $1.1 million, so who knows?”

Armstrong said the city brought in an independent financial advisor last year to calculate how the caps, one percent for homeowners, two percent for businesses and three percent caps for rental properties will affect the city.

While the LSA said the city could lose $1.6 million by 2010, the independent advisor said the number is closer to $3.6 million. Armstrong said he can’t explain the disparity between the two estimates. He said that may lead to confusion among city leaders when they plan next year’s budget.

“We’re looking at at least $3.6 million, and maybe more. Jobs are not what they were seven or eight months ago,” he said. “We have to certainly look at the worst case scenario, and that’s what we’ll deal with.”

Armstrong said despite the strain the new caps place on the city’s budget, he supports them. But he said cities need more tools to be able to tax and charge user fees in order to pay for expenses. Armstrong made his comments on WFIU’s “Ask the Mayor” program.

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