Lower COIT revenue decreases budget

The recession’s slam on the City of Bloomington’s budget was the topic of discussion during a Wednesday night city council meeting. Mayor Mark Kruzan announced that Bloomington has a $869,000 decrease in the 2011 city budget. This decrease is because of lower County Option Income Tax revenue, caused by the economic downturn.

“Our COIT loss is likely a product of Monroe County residents who’ve lost their jobs and lower investment income,” Kruzan said.

Less income for county residents means less income tax revenue that the county and city receive. Although unemployment levels in Monroe County have remained low compared to the rest of the state, the same cannot be said for neighboring counties where many Bloomington residents work.

The COIT revenue the city will receive for the 2011 budget is based on income levels from January 2009 through July 2010, an 18-month recession period. Kruzan referred to this as the echo effect.

“This is when the recession hits local government,” Mayor Kruzan said.
Bloomington has sufficient financial reserves to cover most of the decreased COIT revenue.
 COIT revenue for 2010 increased, which will also help cover the decrease.  
But the city will have to make spending cuts. The city will delay a historic survey and decrease funding for the Mayor’s Promotion of Business. In addition, the city will reduce newly hired police officers from three to two.

“While it’s unfortunate that we’ve had to reduce by one, we’re still doing very well by being able to add two,” Bloomington Police Department Capt. Joe Qualters said. “The hope is that we may be able to make that up in years come as the
budget allows.”

The city had expected a $1.3 million COIT revenue decrease, but a financial miscalculation worked in the city’s favor. Before the miscalculation was discovered, the city was planning to freeze all non-union and elected officials’ salaries. Because of the miscalculation, Kruzan said salary freezes are no longer
necessary.

Kruzan said there is still a significant commitment to public safety and social services.
“This budget does what we do best, investing in Bloomington,” Kruzan said.