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Terre Haute blames tax caps for borrowing need

TERRE HAUTE, Ind. (AP) — Terre Haute has borrowed millions over the last two years to meet daily expenses and avoid massive layoffs as it faces a general fund cash balance that is one of the lowest in the state.

Experts recommend cities have a general fund balance that equals about half of their expected property tax levy when the fiscal year ends June 30. The Tribune-Star reports that would have been about $12 million for Terre Haute in 2012. Instead, the city had less than $41,000.

City Controller Leslie Ellis says such balances are possible only in a "perfect world" and blames Indiana property tax caps enacted in 2008.

Mayor Duke Bennett says the city is looking at cuts and other cost-saving measures in hopes of balancing its budget in 2014.