City-County Council begins debate about how to pay for preschool

Paying for a new city-sponsored preschool program could get tricky for the Indianapolis City-County Council.

Under a proposal the city could consider this week using about $2 million from a reserve fund for the first year. A plan has yet to be figured where the rest of the city’s share of $20 million over five years will come from.

The overall plan is to spend $40 million on preschool through a public-private partnership among the city, businesses and philanthropy groups to serve 1,000 poor children. It was passed the council by a wide margin in December after months debate leading to a compromise between council Democrats and Republican Mayor Greg Ballard.

Democrats blocked by Democrats blocked the plan initially objecting to Ballard’s plan to pay for the program by repealing the local homestead tax. Council Vice President John Barth will propose appropriating $4.2 million for the first year of the plan at a council committee meeting on Wednesday.

“We’re moving forward with what we what we agreed on,” Barth said.

A proposal submitted to the council outlines about $2 million annually is proposed to come from the city’s fiscal stability fund. Once used to shore up the city’s finances, council CFO Bart Brown said it was tapped into recently to fund the Indianapolis Metropolitan Police Department’s latest recruit class.

City officials also plan to use about $1.7 million that was saved through a change to the homestead tax credit program, and tap into the county’s general fund.

Deputy Mayor Jason Kloth said the mayor’s office worked with Democrats and Republicans to foster support for the plan.

“We’ve gone to immense lengths to forge bipartisan support for the sources of funding,” Kloth said.

Preschool advocates including Eli Lilly and Co., which rallied businesses in support of the plan last year, are hoping the debate over how to fund the plan passes the Council without any hiccups. Lilly Foundation President Rob Smith said businesses have raised $6.2 million to support the plan so far.

“I’m confident this will pass out of committee and pass the full council,” Smith said. “There will be questions and a good debate, but it will pass and we can begin to really ramp up the implementation of this program.”

But some council members from both parties have already warned they would be watching to see what sources the funds come from before they give their final support to the program.

“Not one cent of this money should come from (police),” Republican Councilman Aaron Freeman said back in December. “Not one cent should come from the public safety tax. I will be a ‘no’ vote at that point. We should find another mechanism to fund this outside of that.”