Wednesday, September 18, 2013

Ballard Administration Lying About State Transportation Funding Windfall To Tout $135 Million In New Borrowing

Mayor Greg Ballard has been pressuring the Indianapolis City-County Council to give the city authority to borrow $135 million by floating a new bond issue to help fund $350 million in new spending for streets, sidewalks, trails and bridges--new projects being pushed by the pay-to-play contractors who contribute heavily to his campaign committee and lavish gifts on him and family. Ballard has been touting a supposed "windfall" from new transportation dollars that will be coming from the state to help pay debt service on the $135 million bond issue. He claims a new funding formula will send at least $7 million more a year to the city from gas tax revenues, which seemed a bit incredulous given recent reports about how the state was running out of funding for new transportation projects for its own budget given the depletion of Major Moves funds. More importantly, it seemed dubious to expect any additional state funding to remain permanently in place to pay off a 30-year bond issue.

The Indianapolis media, in particular the Indianapolis Star Scar, immediately jumped on the bandwagon and began editorializing in favor of Ballard's borrow and spend approach without conducting any due diligence concerning his plan. Fellow blogger Pat Andrews has obtained data from the state Auditor's Office which calls into question Ballard's claims of a windfall, which indicate that projected revenue sharing with Indianapolis next year is a much smaller figure than Ballard claims it will be, meaning added debt service will cut into the current operating budget of the Department of Public Works:
I received the real gas tax revenue numbers from the State Auditor's office.  The estimated 2013 distribution of the "Motor Vehicle Highway" revenue to the City of Indianapolis and the County of Marion is $20.25 million.  The estimated 2014 distribution is $23.75 million.  That is a difference of $3.5 million.  Less than half of the $7.8 million the Mayor, Bond Bank Director/Deputy Mayor Deron Kintner, and DPW Director Lori Miser have been touting as the windfall that will pay for the bond.
As I noted earlier, the Proposal actually called for annual payments of $9 million on the bond.  So, given that the real gas tax revenue increase is a paltry (by comparison) $3.5 million - they had plans to tap $5.5 million every year for 30 years of money that is usually needed for other things in DPW.  That's not only taking the next generation's increased gas tax, its also trading existing services that by rights should remain in place for the next 3 decades.
There still remains the $240 million of revenue that is already earmarked for road and sidewalk repair over the next 3 years - and that is no small amount of money.
So we have a mayor who is deliberately inflating the state windfall as an excuse for borrowing $135 million when there is already $240 million in new spending planned over the next three years on transportation-related funding without going further into debt. As Andrews notes, Ballard is simply robbing money from future administrations and generations of taxpayers to enrich his fat cat political contributors. By resorting to long-term borrowing instead of paying as you go, city taxpayers will spend an additional $75 $120 million to pay the professional fees and interest associated with issuing bonds.


Citizen Kane said...

Can't imagine him lying about anything. I have more respect for common street thugs, at least they don't pretend they are doing you a favor when they mug, steal and plunder.

Had Enough Indy? said...

First of all, thanks for circulating this information to your readers.

Second, though, one correction. The fees and interest amount to at least $120 million.

Gary R. Welsh said...

Thanks for the correction, Pat.

Paul K. Ogden said...

I think $120 million is a low ball estimate. I did the math on the borrowing at 30 years at 4.99% interest, and it's more like $140 million.