Ballard Learning That Governing Is Not So Easy

As a candidate for mayor, Gre Ballard tapped into the anti-government and anti-tax wildfire sweeping through our city last year. He supported a radical notion of repealing the property tax. He stood firmly against Mayor Bart Peterson's 65%, $90 million a year increase in the local option income tax. And he promised to cut spending by at least $70 million. Failing that, he said he would not seek re-election in four years. If only governing were as easy as campaigning.

Less than 60 days into his administration, Mayor Ballard's tune has changed dramatically. He quickly abandoned support for the repeal of the property tax, explaining that passage of the radical idea was simply not feasible. Instead, he jumped aboard Gov. Mitch Daniels' plan to constitutionally limit property taxes to 1% of a home's value. It's not a repeal, but it promised to reduce most homeowner's tax bills by at least one third. This week, Ballard visited the House Ways & Means Committee to testify in support of Gov. Daniels' tax cap plan at the invitation of the Committee's chairman, Rep. Bill Crawford (D-Indianapolis). In addition to expressing support for the Daniels' tax cap plan, Ballard pitched a Marion County consolidation bill sponsored by Sen. James Merritt (R-Indianapolis), who chaired his campaign committee last year, and he asked lawmakers to approve a proposal to have the state pick up the cost of the City of Indianapolis' unfunded pension liability.

Mayor Ballard would have had a tough enough time convincing lawmakers it was a good idea to cut into Marion County's revenue base by supporting Gov. Daniels' tax cap plan--$100 million according to one estimate--but asking them to pick up the cost of the city's unfunded pension liability created quite a conundrum for the rookie mayor. Rep. Win Moses (D-Fort Wayne), himself a former mayor, wanted to know how Mayor Ballard was going to live with the reduction in revenues the tax cap plan would bring about. Ballard responded that there was "a lot of fluff" in the budget and that "everything is on the table." Pressed by Moses, Ballard conceded everything wasn't on the table. No, he would not reduce the number of police officers. He was less certain about firefighters and, yes, he might cut parks. Moses asked Ballard if he had any specific cuts identified yet. Ballard answered "no." Would he have cuts outlined before the legislature adjourned next month. Not likely he told Moses. Responding to Ballard's testimony, Moses said he knew Ballard didn't mean everything he said to committee members and questioned his support for a tax cap plan he thought would wreak havoc on the City's already teetering financial situation. Indeed, Ballard doesn't even have a broad plan for how he is going to find $70 million in cuts.

State Rep. Carolene Mays (D-Indianapolis) wasn't helping Ballard out much either. She wanted to know why Mayor Ballard was asking the state to pick up the City's unfunded pension liability when the local option income tax increase approved last year had already raised $26 million for city coffers. Mayor Peterson had planned to issue bonds to pay off the pension debt and dedicate $30 million a year in COIT revenues over the next 40 years to pay off that debt. Peterson shelved that plan after he lost the election. Ballard conceded that the money sits today in the City's general fund awaiting action by Ballard and the GOP-controlled City-County Council. Ballard told Rep. Mays that he would like to rescind last year's COIT increase, but he conceded in his testimony that a rescinding of the tax increase would likely not be feasible unless the state picked up the cost of the City's unfunded pension liability. In other words, Ballard will keep Peterson's tax increase unless the state helps him out in finding cuts in the budget.

Of course, the claims of lost revenues if property taxes are capped is a bit of an exaggeration. Rep. Jeff Espich (R-Uniondale) reminded committee members that revenues to local government would continue to grow each year once the tax cap is implemented. Is there a one time hit? Yes. Is the loss permanent? Not exactly. The plan put forward by Gov. Daniels in no way ensures that spending by local governments will come to a crashing halt. What it does is halt their reliance on the property tax to fuel their appetite for spending. So if city taxpayers see relief on their tax bills this year, it will happen because of the action taken by our state lawmakers and not Mayor Ballard and the GOP-led council.

Making matters worse, Ballard's efforts to squeeze out savings through further consolidation has hit a big roadblock. Ballard supports Sen. Merritt's effort to do away with township trustees with fire department responsibilities, which would be consolidated into the IFD under Merritt's proposal. Merritt's plan exempts the Center Township Trustee, long a cesspool of political corruption and patronage. Nonetheless, Crawford doesn't support the elimination of any township trustees. As a consequence, he says he will not allow Sen. Merritt's government consolidation plan for Marion County to move forward according to the Star's Bill Ruthhart. Instead, he wants to wait until local government consolidation as proposed by the Kernan-Shepard Commission can be tackled statewide next year.

So where does this leave Ballard? If Gov Daniels' tax cap plan is approved without helping out with Ballard's pension liability problem, he will wind up breaking every single major promise he made during last year's campaign on taxes and spending. He obviously has no idea where to start in reaching his goal of cutting $70 million. Gov. Daniels' tax plan will further cut city revenues next year by $40-$45 million according to Ballard if the estimates are to be believed. And he can't rescind Peterson's unpopular income tax increase because he'll need every dollar of it to shore up the City's budget, and that probably doesn't include a long-term plan to deal with the pension liability. Will Ballard keep his promise and only serve one term if he is unable to implement the fiscal plan he promised to implement if he became mayor? It seems unlikely given that he raised close to a million bucks during the last 60 days, largely from businesses and individuals with a financial stake in city business, for his campaign committee.

An avid Advance Indiana reader sent me a story from the New York Times dated November 29, 1913 as another alternative for what Ballard could do. The story was about an Indianapolis mayor of an entirely different era. His name was Samuel "Lew" Shank, a Republican, who was probably one of the last true populists elected as Indianapolis mayor. In that era, Indianapolis had a street car public transportation system, yet another reminder that our city has fallen backwards over the past century when it comes to public transportation. The street cars were operated by railway workers who belonged to the Teamsters, and who had been striking against the street car company. Local business leaders had insisted that Mayor Shank force city police officers to ride the street cars to help keep them operating, but he resisted. Shank sought unsuccessfully to get the two sides to reach an agreement to ensure there would be no further strikes during his administration. Having failed to get such an assurance, he announced his resignation as mayor. Prior to his resignation, Shank had earned a lot of public support by forcing food distributors to lower prices in the city. An auctioneer by trade, Shank started purchasing food products from wholesalers on his own and selling them at cut-rate prices. The tactic proved successful in driving down food prices citywide. Shank discontinued the practice once assured the food distributors were going to charge a fair price. Maybe Ballard could take a page out of Mayor Shank's book.