Controller Jeff Spalding, Mayor Greg Ballard and Ballard's Chief of Staff Ryan Vaughn.  (WIBC.com photo: Reed Parker)

Indianapolis Mayor Greg Ballard has proposed a 2013 budget for the city that comes in at around $1 billion.

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A $65 million gap lies between the city's revenue and projected base expenses. The Mayor attributes the gap to lower income tax receipts, which were down $48 million from 2010, and lower property tax revenue, which was down $10 million.

Ballard's proposed budget also outlines a plan to bridge that gap. It includes reopening IMPD and IFD contracts, eliminating the local homestead tax credit for homeowners, utilizing $20 million in City-County fund balances, using the $17 milllion rainy day fund, and seeking $10 million reimbursement from TIF districts.

The Mayor's spending plan does not include any money for new recruit classes for police and fire departments, which means the number of police officers will drop as members retire. The Mayor's chief of staff, Ryan Vaughn, says the budget allows for the funding of between 1,580 and 1,599 officers in the department. Right now, there are 1,599 in the department with 15 to 20 expected to retire next year. Eliminating the negotiated pay raises for IMPD and IFD would save $5.5 million. Each departments' budget would be increased by 5% and 3%, respectively, despite the elimination of pay raises.

City Controller Jeff Spalding says elimination of the homestead tax credit would not affect the tax rate. Mayor Ballard says the move will likely increase some residents' property taxes, but adds that it would amount to an average cost of $24 per year.

The City-County Council must pass a budget by the end of October.