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Gary awaits bailout decision

Officials in Gary, Indiana are awaiting a decision from the state on whether it can avoid making painful cuts to its already bare-bones budget.

Indiana’s Distressed Unit Appeals Board (DUAB) will decide Wednesday whether to allow Gary to get around the state’s constitutionally required property tax caps, which stand at one percent for homeowners and two percent for businesses.

If it gets the exemption, the city could avoid cutting $11 million from its current budget of $41 million. If it doesn’t, Gary officials will likely have to make deeper cuts from public safety and other services. Just last fall, the city cut 30 firefighters due to a tight budget.

Gary Mayor Rudy Clay said he expects the DUAB to grant the city’s request for a lifeline.

“I’m extremely optimistic that they will approve our petition for tax relief but we take nothing for granted,” Clay said. “We still have a few butterflies but I’m optimistic.”

Clay made his statement at a press conference Tuesday, where he announced his endorsement of Karen Freeman-Wilson, his one-time opponent in the Democratic mayoral primary. Clay recently dropped out of the race so he could concentrate on his personal health. He is currently fighting prostate cancer.

Both Freeman-Wilson and Clay plan to attend Wednesday’s meeting with the DUAB in Indianapolis. The DUAB has granted Gary property tax relief for the last two years. Clay said he expects similar support this year, because the city has cut millions from its budget over the past several budget cycles. He said he expects the board members to reward that effort.

“We’ve been sort of holding hands now for the last three years. I expect them to [approve] our petition for tax relief,” Clay said.

The tax caps have Gary particularly hard because its tax base has dwindled, mostly due to business disinvestment and continued population decline. U.S. Census figures suggest Gary lost approximately 20 percent of its residents during the last decade. A smaller population for Gary also means fewer federal tax dollars.

While Indiana’s property tax cap has reduced revenue for cities throughout the state, only Gary has asked the DUAB for state assistance. This is the third and final year Gary can ask for such help from the state from the DUAB, which disbands after this year.

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