Mayor Bart Peterson took his campaign for new taxing powers to the Statehouse on Monday, warning lawmakers that without their help Indianapolis could end up shelling out millions of dollars more to pay off pensions and fix the city's sewers.
One of the nation's biggest credit-rating agencies, Standard & Poor's, is threatening to downgrade the city's rating if Indianapolis does not find a way to address its deficit, pension liabilities and growing public safety needs.
The city's AAA bond rating, maintained by a handful of cities nationwide, has let it borrow money for significantly lower interest rates than municipalities with lower ratings.
Looking for help, Peterson made a last-ditch effort Monday to turn up the heat on lawmakers as deadlines loom this week to pass bills that would help Indianapolis.
The city is seeking legislative authority to raise new taxes in order to spend $85 million a year to plug a pension-related budget deficit and pay for new crime-fighting initiatives.
"If we don't see success here in the legislature, it's clear the credit agencies will downgrade the city," said Peterson, a Democrat. "Lawmakers can't keep cutting back on the ability to raise funds and expect cities to keep running."
Barbara Lawrence, who heads the Indianapolis Bond Bank, said a AA credit rating would cost the city about $3 million more in interest costs during the next 30 years on its proposed pension fix.
The Peterson administration hopes to sell $450 million in bonds to permanently address its underfunded police and firefighter pension funds.
The bottom line is your taxes are going to go up whether Mayor Peterson gets more taxing authority or not. The only question is which taxes are going up. It would have been nice if the Mayor had thought about these issues when he handed out hundreds of millions of dollars in public subsidies to some of Indiana's wealthiest citizens over the past 8 years.