Sunday, November 23, 2014
Council Moves Forward With Yet Another Tax Increase
Next year your property tax bills are going to increase under a plan passed by the Public Works Committee with little discussion or even general understanding by the Indianapolis City-County Council members who voted on what the plan encompasses. The proposal will increase stormwater management fees that appear as part of your property tax bill, which do not apply against the property tax caps mandated by the state's constitution, to triple the amount currently collected annually from $10 million to $30 million. Those increases will fall primarily on homeowners, and it's not just a one-time increase. Automatic rate increases can be imposed over the next 20 years without any council action.
As is the case with so many proposals before the council, the members appeared completely ignorant of what exactly it was that they were voting upon. Fellow blogger Pat Andrews tried to educate the members on the shortcomings of their proposal, but her comments largely fell on deaf ears. According to Andrews, the proposal raises an additional $10 million to pay for operations, or a total of $15 million. About $15 million a year will be made available for capital projects; however, at least $5 million of that amount will be used to pay off old bonds. The effect of the proposal is to free up about $10 million in the current city-county budget that is spent to cover operating expenses concerning stormwater management according to Andrews. It supposedly provides a sufficient revenue stream to address the cost of undertaking stormwater management projects over the next 20 years.
One of Andrews' most pointed criticisms of the past stormwater fees approved by the City-County Council is that the past fee never lived up to its promises of being put towards new stormwater management projects. Instead of putting the initial $5 million a year towards new capital projects, most of the money wound up getting used to pay off old bond debt. A subsequent $5 million a year increase actually provided the additional $5 million a year needed to fund new capital projects--until the Ballard administration decided to sell off the sewer and water utilities to Citizens Energy. We've all seen our sewer and water bills skyrocket, in part, to pay higher debt to pay for the nearly half billion overpayment Citizens Energy paid to the city to buy the utilities, which was used for infrastructure projects, including the mayor's cricket field. More importantly, DPW lost $6 million a year the utilities spun off to pay for its operating expenses with the sale. As a consequence, the city diverted money intended for stormwater projects to cover DPW's operating expenses.
So now the City-County Council is going to allow DPW to triple the amount collected from stormwater fees, plus allow the fees to be raised annually for the next 20 years with the promise the money will get spent this time to pay for the projects the first two stormwater fee increases supposedly funded. The fee increase on homeowners is being masked as a fairness issue. Homeowners currently pay a flat fee per parcel. Under the proposal, they will now pay a fee based on the amount of stormwater runoff theoretically generated by their property, which can result in four-fold increases in some cases. As Andrews surmises, it's likely a plan designed to shift DPW's funding to provide additional funding elsewhere. At any rate, homeowners will be hit with another $20 million tax increase and every year thereafter for the next 20 years, on top of the 10% income tax increase you will start paying on January 1. The council committee's discussion was alarming in the sense of just how wilfully ignorant the council members are when making decisions that affects their constituents' pocketbooks. The local media won't tell you about that fact, but now you know. It's also obvious why the Democrats didn't want Andrews on the council when she ran the last time. God forbid we elect someone who actually knows something.