Friday, July 20, 2007
Council Democrats Vote To Tax You More
Unable to reign in their uncontrollable habit to spend, Democrats on the City-County Council's Administration and Finance Committee outvoted Republicans on the committee by a 4-2 vote to send a proposal to increase the county option income tax 65% to pay for pensions, more police officers and added criminal justice expenditures and a supposed freeze in local property tax levies. Council member Lance Langsford (R), a firefighter, was on vacation and did not vote. Councilor Vernon Brown (D), another firefighter on the committee, voted for the tax increase to fund his own department's budget. Councilor Lincoln Plowman (R), a police officer, voted against the proposal. Committee members were forced to reconvene in the Assembly room after the public hearing room quickly filled up.
About 20 police officers were detailed for crowd control tonight. It seemed a bit of an overkill, particularly to the gentleman who testified against the proposed tax increase and whose wife was beaten and robbed outside a donut shop this morning. "Where were you all this morning when my wife needed help," the man said to the police officers lined up behind Sheriff Frank Anderson (D).
Committee Chairman Joanne Sanders (D) opened tonight's meeting by publicly apologizing to Jack Borgerding, the Lockerbie resident who was ejected from Monday night's meeting after he publicly testified against the tax increase. Borgerding was in the audience tonight. I spoke to he and his wife, Christine, tonight before the council meeting. Jack wants to move on and not let what happened to him be the center of focus. Christine jokingly asked me if Jen Wagner wants to know if they have a joint bank account in reference to Wagner's suggestion that her husband did not testify honestly about his property tax bill because their home is listed in her name.
There was considerable discussion tonight on the portion of the income tax increase that will be used to fund police and firefighter pensions. An historical explanation tells us that the unfunded liability was first addressed back in the 1970s when a portion of the cigarette and liquor taxes was earmarked for pension liability relief. In the 1980s, Indianapolis enacted its first county option income tax for the first time at the rate of 0.2% for the sole purpose of funding a pension relief trust fund. The rate eventually increased to 0.9% by the late 1990s. The COIT originally generated about $8.5 million for the trust fund. Transfers to the trust fund rose to $11 million annually in the Goldsmith administration, even reaching $15 million at one point. Over time, however, the City-County Council began raiding COIT funds for other uses--namely public safety expenditures. So now we are facing yet another 65% increase in the COIT to only partially fund the pension problem. The bulk will go to added public safety and criminal justice spending. Although Councilor Nytes suggested the increase would allow the council to freeze local property tax levies, audience members weren't buying it.
There was also some discussion about what happened to the supposed savings from police and fire consolidation. A city official claimed nearly $18 million in annual savings from the consolidation of IPD and the sheriff's department and the consolidation of two township fire departments, Washington and Wayne, into IFD. The city is, however, spending an extra $53 million in the annual budget for public safety, compared to an overall city budget increase of $47 million. So the short answer is that we saved you $18 million by consolidating, but we plowed all those savings and then into additional spending on public safety.
The consensus of members of the public who testified at tonight's meeting was that the council should table the tax increase for now. Let's see what comes of legislative attempts to address the statewide property tax and local government financing problems in the coming months. It was apparent to audience members that this tax increase is a stop gap measure at best. What did last year's 0.1% increase in the COIT get us? The loudest reaction from the audience came when Tom Miller of the Indiana Firefighters suggested Indianapolis was one of the lowest taxed cities in the country and this new tax increase would not be particularly burdensome. That evoked a strong reaction from the audience. Miller quickly ended his testimony and took his seat.
Sanders tipped the Democrats' hand when she hinted that the Mayor would announce steep budget cuts tomorrow morning in store if the council fails to pass his tax increase. It will likely include laying off police officers and firefighters. Council Republicans, for their part, will announce an alternative 10-point plan on Monday to get by without an immediate tax increase. Councilor Plowman suggested that proposal would be offered as an amendment to the ordinance committee Democrats passed tonight.