The City of Carmel’s 2016 budget was passed by the city council without any major changes. Yet, two councilors who voted against the budget are saying the budget will mean higher property taxes and unnecessary salary increases.
Carmel Mayor Jim Brainard said that’s just not true.
The budget includes a property tax rate at 71.43 cents per $100 of assessed value, an increase from the current rate of 70.07 cents. It was passed 5-2 by the council.
The new tax rate amounts to an increase of about $59 per year for a home of about $200,000. Homes at $345,000 or more are already at the property tax cap, so they won’t be affected.
Brainard has resisted calling this a tax increase, instead referring to it as a slight adjustment to bring taxes back to where they were in 2013 and actually could end up being lower than they were at that time.
Carmel City Council President Rick Sharp, who voted against the budget, said that’s just spin from the mayor, and the bottom line is he promised in the recent mayoral election that no tax increase would be needed. Sharp said he doesn’t trust the mayor’s numbers, because he said they only tell the story the mayor wants to tell.
Sharp said the tax rate was set at 52.84 cents when he took office in 2004, raised to 70.07 cents in 2013 and will go to 71.43 cents in 2016.
Brainard countered that Sharp is only using the tax rate caps and not where the rate was actually set. He said it was also for only the general fund and not the overall property tax bill – usually a district tax – that homeowners receive. The mayor said the rate cap only shows the highest taxes can be and it often is advertised higher in order to protect the levy when it comes under review from the state’s Dept. of Local Government Finance.
Brainard said the DLGF could suggest that Carmel cut its budget if it doesn’t think revenue projections will meet spending. For that reason, Brainard said they advertise the budget high and then can actually implement it at a lower rate.
Brainard provided an example of one home on Carmel Dunes Drive where the assessment went up from $108,220 in 1998 to $182,800 in 2013, but the taxes went down from $2,813 to $1,742. He said the 2015 tax bill was $1,772, and he anticipates 2016 could be approximately $8 cheaper than 2013.
City Councilor Eric Seidensticker, who also voted against the budget, was critical of salary increases in the budget. He questioned why City Attorney Doug Haney needs a 20 percent increase in pay and Nancy Heck, director of community relations and economic development, is getting a 10 percent increase. Brainard said Haney’s pay increase is because he was far below market value, and Heck’s is because she was given added job responsibility with economic development.
Seidensticker also questioned why every city employee needs an automatic 3 percent increase in pay for cost of living. While other cities increase pay similarly, often performance reviews are contingent. The Social Security Administration is not giving any cost of living increase for 2016.
Brainard said those aren’t good comparisons and Carmel looks at cities that are similar and private practices. Small towns, federal bureaucracies and budget-strapped metropolises aren’t a good comparison.
“We want to be competitive,” he said. “And I would say no city employees in Carmel are overpaid. Given that it’s government work, many could make more in the private sector, but we are happy they choose to work for us.”