In a surprise move, the Indiana Department of Local Government Finance (DLGF) announced Friday it had extended the date for local units of government 2009 budget adoption from Sept. 30 to Dec. 1. Although the measure gives more time for governmental units, such as the city of Delphi, the town of Flora and Carroll County Council, to process budgets, it might not do anything more than allow those developing the budgets additional information about how much revenue could be realized in 2008.

"Allowing local units of government the option of adopting budgets until Dec. 1 is in the best interest of taxpayers," David Bottorff, executive director of the Association of Indiana Counties, said in a press release. "It will give the counties increased flexibility as to when to adopt their budgets. Local governmental units will be able to obtain better information so they can evaluate potential tax rates, levies, budgets and the effects of the circuit breaker."

The director of the Indiana Association of Cities and Towns agreed the extension could be helpful for entities such as Delphi and Flora.

"While most cities and towns are well on their way to finalizing budgets at this point, the added time may give some flexibility to those who are finding it necessary to run additional calculations to analyze the impacts of the new property tax caps," Matthew Greller said.

"By extending this deadline, local officials will have more time and information to plan and adopt budgets that will better match tax bills with the taxpayers' ability to pay," DLGF Commissioner Cheryl Musgrave said.

Carroll County Council President Nancy Cripe viewed the extension positively. She said Tuesday the state added a step to the budget process this year and that is taking time which the council has little of this time of year.

"The deadline is being ex- tended partially because a new step has been added to the budget process," she said. "HB1001 requires all nonschool units to submit their proposed budgets, levies and tax rates to the county council at least two weeks before they are fixed. The council is to make non-binding recommendations to the taxing units."

"The extension of the deadline will allow the council adequate time to review all non-school taxing units in the county," she continued. "Currently taxpayers pay a cumulative rate of all taxing units in their community. This new step in the budget adoption process has been added for the county council to consider the total impact to the taxpayers."

Council member Steve Ashby said Tuesday he expected the submission delay would be used by the council to "spend more time applying the Local Option Income Tax (LOIT) to the county situation.

"There are three different LOIT plans to consider," he said. "We'll be doing the 'what ifs' for each one."

Both council members said the budget process this year is "a very complicated situation." They explained the state estimated the county would collect approximately $590,000 less from property taxes in 2009, due to state-imposed property tax caps which are part of HB1001. (The 2009 budget is the one currently being developed by the council. It is necessary to factor in the $590,000 reduction during budget preparation.) Property tax income is expected to fall another $710,000 in 2010 for Carroll County. (The 2010 budget will be developed next summer.)

Ashby explained that once department heads submit budget requests to the auditor, which was July 7, they are not allowed to change line item amounts based on additional spending information. He said only the council could change the numbers to fit the expected income. He further explained the council could only reduce, not increase, a requested appropriation.

Ashby said the council must continue to work to reduce general fund appropriations to match expected 2009 income. He said 2009 budget requests from department heads were approximately $745,260 more than what was appropriated for 2008, but emphasized that some departments submitted reduced, rather than increased, spending plans.

"As far as the budget process is concerned, the extension isn't any great boon for us." Ashby said.