INDIANAPOLIS -- What looked highly improbable to local political observers for months has happened.

Republican and political newcomer Greg Ballard (pictured) declared victory in the race for Indianapolis mayor Tuesday night, riding an anti-incumbent sentiment fueled in part by rising taxes to deny Mayor Bart Peterson a third term.

The same sentiment appeared to have given Ballard's party a majority in the City-County Council. Democrats held a 15-14 advantage heading into Election Day, but preliminary results from Tuesday show the GOP taking control by a 17-12 margin.

With 99 percent of precincts reporting, Ballard was beating Peterson 51 percent to 47 percent. Fred Peterson, a Libertarian, had 2 percent. The Associated Press declared Ballard the winner at about 10:30 p.m. Tuesday.

"Welcome to the biggest upset in Indiana political history," Ballard told supporters in his victory speech. "This is the classic, if not the ultimate, example of grassroots politics."

Peterson, a Democrat who had a huge fundraising advantage over Ballard and ran many more TV commercials than his opponent, told his supporters he called Ballard to congratulate him.

"It's time to rally around the new mayor and to give as much to this city as you always have," Peterson said, "because at the end of the day, it isn't about one individual or one administration -- it's about the great city of Indianapolis."

When Republicans nominated Ballard, a retired Marine Corps officer, six months ago, many political experts predicted a runaway victory for Peterson. But recent polls suggested the race tightened as residents complained of crime, rising property taxes and an increase of the county income tax.

Peterson's loss will end an eight-year hold on the office. His first election, in 1999, marked the first time in more than 30 years that the city elected a Democrat as mayor.

House Minority Leader Brian Bosma, R-Indianapolis, was among those who gathered Tuesday at the Murat Temple, the election-night headquarters for Marion County Republicans. Before the race was called, Bosma was asked whether he would be surprised if Ballard won.

"Not really surprised tonight. (It would have been a) surprise six months ago, but Greg has worked hard," Bosma said.