Thursday, August 21, 2014

Council Committee Nixes Part Of Ballard Tax Increase Proposal

Mayor Greg "No More New Taxes" Ballard's plan to eliminate the homestead property tax credit to raise another $7 million, most of which would be spent on a brand new pre-K education spending plan mislabeled as crime prevention, got a thumbs down from the Public Safety Committee last night. The council, however, appears to be willing to go along with raising local income tax rate by about 10% to generate an additional $30 million a year that will supposedly be spent on IMPD staffing.

There are a couple of points that need to be made after watching the budget presentation of City Controller Jason Dudich, who we now know has no qualms about deliberately engaging in deception when testifying at public meetings on the city's budget. Accepting his presentation as factual, which I realize is a leap of faith, it shows that both income and property tax revenues, the two major sources that fund city-county government, are growing at a pretty good clip this year, a trend that is expected to continue next year. Dudich makes some assumptions in the budget that clearly are designed to paint a picture that is much less rosy than it truly is to make it appear that if the council does not raise taxes next year, then fund balances will be drawn down, putting the city's credit rate at risk. Again, he's paid to lie and deceive so keep that in mind.

A second point that is quite striking to me is how the supposed lack of funding for public safety and, in particular, IMPD staffing, is driven largely by the fact that its funding is being crowded out by other sources. I know it sounds like I'm beating a dead horse, but it bears repeating. Your local income taxes were raised 65% in 2007 to support more spending for public safety, which at the time promised to raise an additional $90 million a year in revenues. Today, we have fewer rather than more police officers as promised. The same administration that last year wanted to eliminate the homestead property tax credit and, instead, put that money to hiring more police officers, now wants to use that money for pre-K education. The funding of education has never been an obligation of city government. Why we would want to create a brand new spending program that presumably would compete with public safety funding going forward is beyond me. The meme about how this spending is going to reduce crime ten to fifteen years down the road is total bunk. Head Start and other programs like it have been around since the mid-1960s. The problem of kids dropping out of school and turning to crime exploded after we began all of the new spending ushered in by Great Society styled-programs to eliminate poverty. The definition of insanity is to repeat the same thing over and over again and expecting a different outcome. It's not going to happen.

The Ballard administration's budget for running the mayor-sponsored charter school program has ballooned since Ballard became mayor. Despite a state law that clearly allows the City to recover the costs of administering the costs related to charter schools from the schools, Mayor Ballard refuses to recover those administrative costs. That decision is costing the City millions of dollars a year in unnecessary expenses. Back before the City-County Council foolishly bought into Ballard's plan to privatize the parking meter assets based on the argument that it was impossible for the City on its own to install electronic meters and use that opportunity to increase revenues through higher fees and/or hours of operations like cities all over America have done, the City chose to forego millions of dollars a year in new revenues that now go to the private operator of parking meters. While the administration gloats that it still generates more money than it did under the old meters operated by the City, none of that money is going to support IMPD. Yes, before parking meter privatization, revenues generated from the parking meters went to support IMPD. Now that money can only be used for infrastructure improvements in downtown and Broad Ripple where the meters are located. Again, that has resulted in the loss of millions of dollars in revenues that could have and should have been used to fund public safety because the Mayor would rather have the money to dole out to his campaign contributors for pet projects.

The City-County Council tried unsuccessfully to raise millions of dollars a year annually for public safety by levying a payment-in-lieu-of-taxes on the CIB to help offset the public safety costs associated with all of the special event costs related to the sports palaces and the convention center. That law had been on the book for decades but never utilized. Ballard not only vetoed that measure, but he also went to the state legislature and got the law changed so that the City never again can exercise that option of funding in the future. Around the same time, the administration was pushing through yet another tax increase to support the cash-rich CIB that had only years earlier pleaded insolvency if the state and council didn't enact a serious of tax increases and state subsidies to bail it out. When the last of those tax increases was approved, the CIB agreed to share 50% of the new revenues with the City. Now that additional funding is being wound down so the CIB has all of the money it wants to give away to IUPUI to support its Natatorium or for more subsidies for the billionaire sports team owners, shortchanging IMPD funding by about $5 million.

Again, the problem is one of priorities. I haven't even touched on the impact of all of the tax revenues diverted to the TIF districts and handed out in the form of tax abatements, which leaves the City tens of millions of dollars a year short in revenues. Every time someone complains about funding for public safety we are told that higher taxes are the only answer. Yet funding for public safety always appears to get crowded out by other spending priorities. Any councilor who supports raising taxes now to hire more police officers is only kidding themselves or trying again to pull the wool over the eyes of the taxpaying public, particularly when we already know their intent on using a substantial amount of the new revenues for an entirely new spending program that has absolutely nothing to do with public safety.

5 comments:

Paul K. Ogden said...

"The council, however, appears to be willing to go along with raising local income taxes by 0.25% to generate an additional $30 million a year that will supposedly be spent on IMPD staffing."

Not sure if you want to clarify. They're wanting to increase the public safety portion of the Local Option Income Tax from .35 to .5. That's not a .15% increase, it's a 43% increase in the tax. If you look at the entire LOIT it's like 9% or 10% increase.

Gary R. Welsh said...

I was trying to peg the rate increase figure, but it's probably better to talk about the overall percentage rate increase.

Anonymous said...

Ballard needs to realize that WE SEE RIGHT THROUGH his propaganda and misuse of our money.

He talks about those things that we can all agree on and generate emotional response: public safety, education. But he in reality WASTES our tax money on stupid, unwanted bike lanes, a unused and unwanted Cricket field, and the construction industry pays off to him in campaign contributions. Quid-pro-quo, only we taxPAYERS are fed up with the misuse of our money.

Anonymous said...

The city has plenty of money with the state taking over per-1977 pensions, car rental increases, hotel increases, sales tax increases etc. The problem is that the city has one priority, to keep their elistest buddies well paid.

Anonymous said...

Much akin to a teenager wasting his/her $20 allowance an hour after you give it to them, the city doesn't have an income problem, it has a serious spending problem. You don't give the degenerate gambler more money, you ban him from the casino.