Kokomo — The settlement with Chrysler over the assessed value of personal property taxes has changed the area financial landscape as local taxing units finalize the 2011 budgets.

Even with the agreement with Chrysler, property taxes in Howard County will increase next year, but not as much as anticipated, according to Laurie Martin, chief deputy in the Howard County Auditor’s office.

Martin said the assessed value for Howard County went from $2.9 billion to $3.4 billion. The assessed value for personal property in the county went from $376.6 million to $820.8 million.

Instead of having to cut $1.9 million from the county’s proposed $18.1 million budget for 2011, Martin said the amount to be trimmed after the Chrysler agreement is $850,000.

The Howard County Council will meet Wednesday to finalize the 2011 budget.

“The council has already made the necessary cuts to reach the general fund tax levy,” Martin said.

The Howard County Council is considering moving $612,000 in Social Security and pension funds from the general fund to the special County Option Income Tax fund for jail and Kinsey Youth Center operations.

Another $167,000 was moved from the general fund to the Reassessment Fund to pay salaries in the Howard County and Center Township assessor offices.

Martin is anticipating a general fund operating balance of $5.1 million at the start of 2011 and a $5.9 million operating balance at the end of 2011.

“I think, with the Chrysler settlement, we have maintained,” Martin said of the budget process for 2011.

She said some of the residential and commercial real estate in the 1 and 3 percent tax caps will reach the cap, but the majority will not. Martin said the majority of rental property will reach the 2 percent cap next year.

Howard County Councilman Paul Wyman, R-2nd District, said the Chrysler agreement appears to be good news on the surface, but he is checking to make sure all county accounts are at reported levels.

“We have to start making the necessary cuts for future years to come,” he said. “This is the type of environment we will be operating in for a while. Instead of going from crisis to crisis, we need to plan for future years and make the appropriate cuts.”

Wyman said there is no way for the county council to consider providing employee salary increases or bonuses in 2011.

“We’re still receiving less revenue,” he said. “Transferring money between accounts can only go on for so long. People have to keep in mind we’re still facing a shortfall. We need to adjust the budget to new projected incomes.”

Wyman said cuts have to be made to keep property taxes from increasing in the current economy.

Councilman Stan Ortman, R-At-Large, said the council has almost obtained the necessary budget cuts for 2011 and he would be willing to dip into the operating balance to maintain services.

“We may have to look at further cuts down the road,” he said. “What we have done in the past has meant we don’t have to terminate employees.”

Ortman said by not giving pay increases in the past, it has made it possible for employees to keep their jobs and benefits.

“This is my 10th budget and we’ve been cutting the past six or seven,” he said.

Councilman James Papacek, R-1st District, said he estimates, through cuts and transfers, the county budget will be about $1.5 million less than what it was the 2010 general fund budget.

“I’m pretty hopeful the worse-case scenarios will not happen,” he said.

Both Ortman and Papacek agreed that, at this point, there will be no salary increases for employees.

• Ken de la Bastide is the Kokomo Tribune enterprise editor. He can be reached at 765-454-8580 or via e-mail at ken.delabastide@kokomotribune.com