Monday, September 02, 2013

Mayor's Property Tax Increase Plan Will Hurt Republican Council Districts Hardest

Mayor Greg Ballard is giving every Republican member of the Indianapolis City-County Council the choice of supporting his property tax increase plan or siding with the school districts in their districts which stand to lose $11.6 million in property tax collections next year if the IMPD tax levy and elimination of the homestead property tax credit are both enacted as Ballard is urging to close a budget deficit caused by his fiscal mismanagement. The Star's Eric Weddle has a good analysis of the impact of Ballard's property tax increases on the township schools. Ballard has proposed extending the property tax levy to the suburban areas outside the original IMPD district. At the same time, he is proposing to lower the IMPD tax levy within the original taxing district. Because thousands of taxpayers are already taxed at the property tax cap level, the new levy will hit the township schools particularly hard which rely heavily on the property tax. At the same time, IPS expects to gain about $5.2 million from the plan because the lower IMPD tax rate for persons residing in its district will allow it to capture additional revenues it couldn't collect previously because of the property tax caps. Here's a rundown of how the schools will be impacted. The figure on the left represents the impact from the elimination of the homestead property tax credit, while the figure on the right represents the combined impact from eliminating the homestead property tax credit and extending the IMPD levy to the areas outside the current IMPD taxing district.

Decatur Township-348-517.5
Franklin Township-731-1,629
Lawrence Township-596-1,331
Perry Township-450-798
Pike Township-338-514
Warren Township-533-768
Washington Township-533-793
Wayne Township-592-874
Beech Grove NA-57
Indianapolis Public5,9805,226

My only problem with the analysis is that it gives one the picture that property tax caps are to blame for the budget woes facing our local governments. These news reports always ignore the fact that TIF districts approved by the City-County Council and backed by Mayor Ballard have decimated the property tax base that is relied upon to fund basic government services by about 15%. That doesn't include the hundreds of millions of dollars in property tax revenues lost from generous property tax abatements that are handed out by the administration like candy to businesses and developers in exchange for campaign contributions. The mayor and council members operate under the false belief that the TIF districts and abatements have no impact on the bottom line, presumably believing their press releases that their actions create economic growth that expand the tax base. If that were true, then why is it always necessary for them to look for a way to raise taxes on the rest of us who don't receive their tax breaks?


Had Enough Indy? said...

That was a very good article, thanks for linking to it.

You are correct in all you say, although I would debate you on one point. I think the administration and quite a few Councillors know the TIF districts are a problem, but they don't care enough to stop creating them. As long as they can squeeze through their stints in office and keep money flowing to the well connected in their districts, they are happy to leave a growing mess for their successors to clean up.

Jon said...

HEI knows better than most that TIFs are detrimental to schools.

alwaysforright said...

Straub never left

alwaysforright said...

Straub never left

Tax Planning said...

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