SOUTH BEND — City leaders dove head first into next year's budget Monday night, searching for ways to plug a projected $18.2 million shortfall in revenue over the next two years. Deep cuts are forecast, including more than 200 layoffs, and the closing of parks, pools and other city facilities.

The latest city analysis of the impact of Indiana House Enrolled Act 1001 shows South Bend property taxpayers will save $21.3 million annually as a result of the state's recent property tax reform bill. HEA 1001 caps property taxes at 1 percent for homeowners, 2 percent for landlords and 3 percent for businesses.

That property tax savings will leave many local taxing bodies like cities and counties with less revenue in coming years. In South Bend's case, the shortfall is now projected to be $18.2 million per year to the city's general fund, and an additional $3.1 million from the city's Tax Increment Financing districts. TIF dollars are used to fund economic development projects.

The financial impact of the property tax caps has been known for several months now, but Monday night, city leaders translated the dollar losses into projected cuts.

Over the next two years, city administrators project the loss of property tax funding will force them to lay off more than 200 city employees, including 53 firefighters and 40 police officers. That adds up to 15 percent of the city's total workforce.

That's in addition to the 95 positions already eliminated through attrition and the addition of new technology over the last eight years.

The cuts would come from every city department, from parks to public works, and Mayor Steve Luecke cautioned Common Council members Monday they could be deep.

"The picture for 2009-2010 isn't pretty, but it is real," he said while delivering his opening remarks for the Common Council's Personnel and Finance Committee's 2009 budget hearings. "If we lose the revenues, we're going to lose some of the services."

Common Council members will be going over each department's budget with a fine toothed comb over the next two weeks.

The city's Parks and Recreation Department was up first.

Parks Superintendent Phil St. Clair delivered a bleak picture of his department's future if he's forced to go through with the projected $2.6 million in cuts proposed over the next two years.

$800,000 of those cuts will come in 2009. The remaining $1.4 million will be lost in 2010, according to city estimates.

St. Clair anticipates that the $800,000 loss will force him to lay off at least five employees in 2009, and an additional 23 employees in 2010.
While he doesn't expect to have to close any parks facilities because of the loss in 2009, the following year, he said, will be a much different story.

"We looked at which operations can afford to run without the property tax dollars, and which operations can't," St. Clair said.

Many of those that can't be supported by the revenue they generate on their own are now on the chopping block.

According to a city news release by the Mayor's office, they are as follows:

 All city pools. (They’ll close one day per week beginning in 2009)
 All summer playground sites. (Half will close in 2009)
 Howard Park Ice Rink.
 Howard Park Senior Center.
 Studebaker Golf Course.
 Rum Village Nature Center.
 The city’s greenhouse and conservatories.
 The Martin Luther King Jr. and Charles Black Sr. recreation centers.
 Summer track and junior baseball programs.
 Public rafting at the city’s distinctive East Race Waterway.

The department also will reduce maintenance on the fountain at the Morris Performing Arts Center and eliminate one tree crew and all but one park police officer.

Potawatomi Zoo will remain open under the city's spending plan, unless a decision is made to close it to restore park programs already on the chopping block.

St. Clair told the Committee that it's possible pools might not have to close for the extra day each week if at least one "inclement weather" closing occurs during that week. He also said the playground sites that would be closed in 2009 have not been identified yet.

"I don't think [closing Studebaker] is a very good idea," said Andrew Benton, a South Bend taxpayer who was playing the course Monday. "They charge admission to get in here, so I would think shutting it down would make them lose money!"

"They could find a better way to save money than to shut down pools," agreed Kevin Arnold, who says he swims with his three sons at Potawatomi Park Pool 2-3 times per week. "It would be cutting a lot of the kids out, and cutting out something for them to do."

A similar outcry came from staff at the Dr. Martin Luther King, Jr. Center.

"I think it's very important to keep this place open," said Janice Miller, a volunteer at the Center for nearly 30 years. "Kids wouldn't have any place to go. Seniors wouldn't have any place to go. [If this closes] the crime rate will probably go up. I mean, let's be real."

The closing of Rec Centers might not be the only reason why it might go up.

The city's spending plan also projects 40 police officers and 53 firefighter positions could be cut.

Police Chief Darryl Boykins cautioned that no numbers had been finalized yet, because the Police and Fire Departments' budgets won't be discussed at the budget hearings for another two weeks. But he admitted the loss of officers would be a big blow.

"I think any reduction is going to affect any department," he said. "We have to take a good strong look at it before that occurs. But I think public safety will never be jeopardized by the City of South Bend or by the South Bend Police Department."

The projections already have some city leaders searching for other options.

"I think that most citizens, rather than see drastic cuts in public safety, would like to see a balance somewhere," said Common Council President Tim Rouse.

That balance could come from an increase in revenue.

Right now, St. Joseph County's county option income tax is 0.8%. Under state law, it could be raised an additional 0.2%.

Under HEA 1001, local taxing bodies can levy an additional 1.0% local option income tax to offset the losses in property tax revenue. Another 0.25% can be levied as a "public safety tax."

"Common Council members are talking [about that]. Not in a formal meeting, but we are discussing it," said Rouse.

"Right now, this spending plan does not include any additional income taxes," said Mayor Luecke. "We felt it was important at this point to present a real picture to our community of what this loss of revenue means. I think we have some real choices in front of us about the level of service our community wants provided, and is willing to pay for."

The Common Council’s budget hearing Monday also included budget projections from the city's Code Enforcement and Animal Control Department, and Community and Economic Development Department.

The Council will review budgets for Public Works on Wednesday. The Building Department, Mayor’s Office, Legal Department, City Clerk, Century Center and the Administration & Finance department with the Human Rights Office will follow on July 30. Capital, Debt and Self-Insurance funds and the Common Council's budget will be discussed on August 4. The Morris Performing Arts Center, and the Police and Fire Departments' budgets will be discussed on August 6.

The city's budget must be submitted by the end of September.