Star Editorial Raps Lawmakers' Antics On Property Tax Relief

A Star editorial hits the nail on the head today in criticizing recent political gamesmanship by both Republican and Democratic lawmakers which only undermines efforts to achieve real property tax relief and reform. As for the House Democrats altering of Gov. Daniels property tax cap idea to limit property taxes to 1% of household income instead of 1% of the home's assessed value, the editorial has some pretty sharp words:

It may qualify as the worst property tax idea on record.

But the House Ways and Means Committee actually approved a proposal last week that would base homeowners' tax bills not on the value of their properties but on household income.

How would such a radical shift affect tax revenues? Would most Hoosiers' tax bills increase or decrease? Could high-income homeowners create a tax shield by shifting property titles to low-income spouses? Why should the state penalize property owners who decide to invest more in their children's education than in house payments? Or reward those who overextend themselves by buying more expensive houses than they can afford?

Democrats on the Ways and Means Committee, who not only hatched this nonsense but also successfully amended it to SJR 1, couldn't answer such questions. The committee chairman, Bill Crawford, admitted that an analysis of the proposal's fiscal impact, a basic step with any legislation that would affect revenues, had not been completed.

Gov. Mitch Daniels described the amendment as "poorly conceived.'' That's a kind criticism under the circumstances.

House Republicans also quickly and appropriately derided the amendment.

Their criticism didn't end there. Republicans took a few knocks as well:

But the GOP caucus doesn't have much room to criticize. The House version of SJR 1, which would write tax caps into the state constitution, died after Republicans tried to add a series of unrelated amendments to the resolution. One GOP proposal would have even tacked a same-sex marriage ban onto the property tax amendment.

Such distractions underscore the fact that even on an issue as urgent as property tax reform, and even after voters have warned legislators to act now or face defeat on Election Day, the game-playing in the Statehouse continues.

Lawmakers would be well-advised to heed the advice given by the Star editorial, particularly lawmakers from Marion County.

Out-Of-State Special Interests Finance Carson's Campaign

Out-of-state special interest monies are flowing into the campaign of Democratic 7th District congressional candidate Andre Carson despite rhetoric coming from him in last Tuesday's candidates forum at which he decried the role of special interest money in our campaigns and called for comprehensive campaign finance reform. According to a filing with the FEC this week, Carson snatched up $13,200 from out-of-state PACS within a 48-hour period, while reporting no similar large contributions which trigger the 48-hour reporting requirement from within the 7th District.

One contribution which is likely to draw attention is a $1,700 contribution Carson accepted from the Pakistani American Public Affairs Committee. According to PAKPAC's website, it is "the largest and most organized group of American Muslims for a single country." The PAC's objectives include expanding federal aid to Pakistan and advocating the appointment of more Pakistani Americans to positions within the U.S. government. Carson, who would become only the second Muslim elected to the U.S. Congress, has raised concerns in the 7th District among members of his own party because of his ties to Nation of Islam Leader Louis Farrakhan, who has a long history of espousing views condemned as being anti-Semitic, racist and anti-gay. Carson invited Farrakhan to eulogize his grandmother, the late U.S. Rep. Julia Carson, at her funeral. Farrakhan echoed U.S. Rep. Carolyn Kirkpatrick's (D-MI) support for Carson at his grandmother's funeral. Kirkpatrick claimed the dying Carson told her to "send my seed", referring to grandson Andre.

Carson's largest out-of-state contribution, $5,000, came from Majority PAC, which is controlled by U.S. Rep. John Murtha (D-PA), an outspoken critic of the war in Iraq. Murtha was recently embarrassed when an FBI video tape from the ABSCAM investigation surfaced in which he hinted he might accept a bribe at some point in the future. As Wikipedia writes, "The FBI videotaped Murtha responding to an offer of $50,000, with Murtha saying, 'I'm not interested... at this point. [If] we do business for a while, maybe I'll be interested, maybe I won't', right after Murtha had offered to provide names of businesses and banks in his district where money could be invested legally." A resolution was also offered by U.S. Rep. Mike Rogers (R-MI) in 2007 calling for Murtha to be reprimanded after he complained that Murtha threatened retaliatory action against him on his district's earmarks after Rogers attempted to cut an earmark for Murtha's district. The motion was later tabled without action.

Carson collected $1,000 from U.S. Rep. Artur Davis' (D-AL) campaign committee. He also cashed a $2,500 check from UPS PAC in Atlanta, GA and a $3,000 check from Oregon-based Committee for a Livable Future. More importantly, Carson's TV and radio ads hitting Indianapolis' airwaves are being funded entirely by the DCCC. A source confirms that the DCCC began dumping large expenditures in the 7th District race after its internal polling conducted about three weeks ago confirmed the results of an earlier poll conducted by U.S. Rep. Carolene Mays, which showed Carson locked in a dead heat race with Republican Jon Elrod.

Auction Rate Bond Meltdown Spells Trouble For Lucas Oil Stadium

The IBJ's Peter Schnitzler, who is running circles around the Star's business reporters these days, has another great story today on how the meltdown of the auction bond market recently could have a huge, negative financial impact on the debt funding for the Lucas Oil Stadium. Schnitzler writes:

The debt strategy Gov. Mitch Daniels’ top financial officials developed to save the state money on major projects like Lucas Oil Stadium has turned sour. To pay for construction, the administration over the last few years issued $810 million in “auction-rate” bonds—a form of variable-interest-rate debt that once promised to shave costs. But this month’s unexpected meltdown of the U.S. auction-rate securities market has opened the state to risk of sudden spikes in interest.

And now, to avoid extraordinary payments for debt service, Indiana may have to spend millions of dollars on fees to issue replacement bonds.

As far as Wall Street credit rating agencies are concerned, the sooner Indiana addresses its problem, the better.

“We’d expect for a state as highly rated as Indiana, in this situation, that they would take some sort of action relatively quickly,” said Nick Samuels, a vice president for New York-based Moody’s Investors Service. “The state certainly understands what this issue is. And my understanding is they’re working on finding a solution.”

Auction-rate bonds are long-term securities that behave like short-term debt. Interest rates on the debt are reset through auctions staged no more than 35 days apart. The Daniels administration turned to the burgeoning auction-rate market in a bid to keep interest costs low on major projects.

But over the last month, the once-obscure auction-rate market has become the latest victim of the global credit crunch. Recent auctions have failed to generate sufficient investor interest, raising the specter that interest rates on state projects could soar from the low single digits to 15 percent or more.

In other words, we'll soon be paying double-digit credit card interest rates on the construction debt for Lucas Oil Stadium if something isn't done right away. But to hear Daniels' budget director describe the situation, it's no big deal. "Ryan Kitchell, director of the Indiana Office of Management and Budget, downplayed the state’s challenges, saying it intends to refinance," Schnitzler writes. "And because early interest costs on Lucas Oil Stadium bonds were below expectations, he said, the state now is positioned to absorb higher-than-expected rates." Other experts Schnitzler talked to advise their clients against using such a high-risk strategy. Schnitzler notes that the person in charge during the previous Democratic administrations avoided the use of auction rate bonds. “These things change in the market a lot, and typically with auction-rate debt, you need to purchase bond insurance," Diana Hamilton said. "And also the ... fees paid to the investment banker were higher.” That latter statement is the key. "Fees paid to the investment banker were higher." Go back and check how much campaign money Gov. Daniels has collected from investment bankers who have done business with his administration and start putting two and two together.

Ironically, the same self-serving people who got us into this mess are likely to make a lot more money at our expense fixing the problem. According to Schnitzler's story, the fees alone for refinancing this debt could easily top $10 million. "[John Reed] said the biggest problem he had with auction-rate debt was that 'borrowers took all the risk, and the investment banker crowd made a lot of money off of it," Schnitzler writes. "And in many cases, they sold it to people who had no basis being in it to begin with. I hate to be a cynic, but that’s the way it is.”

The timing on this fiasco couldn't be worse. The CIB still has to figure out how to come up with the more than $10 million it will take annually to operate and maintain Lucas Oil Stadium once it opens up later this year, a small matter overlooked by the Peterson administration. Anyone heard what Bob Grand's plan is to fix that problem?

Local Tax Protest Movement Produces Just One Serious Candidate

The Star's Brendan O'Shaughnessy has a good run down of local political races today. One item of note is the only race I can identify where a serious candidate has stepped forward from last year's property tax protest movement to challenge an incumbent legislator. I'm, of course, speaking of Ken Morgan, who is running against Sen. Teresa Lubbers. O'Shaughnessy writes:

Another race that will be watched is that of Sen. Teresa Lubbers, R-Indianapolis. Lubbers is endorsed by the Marion County Republican Party, but her northern Marion County district was among the hardest hit by soaring property tax bills last year.

It was that issue that prompted Ken Morgan, a retired federal employee, to run against her in the primary.

"I had no interest in being a politician at all," Morgan said. "Two things set me off. One of them is property taxes and, second, the lack of a truly open, democratic process."

While Lubbers is heavily favored to win, Morgan said the same was said of Indianapolis Mayor Bart Peterson before November's election put Republican Greg Ballard into office.

The anger that helped elect Ballard is still there, Morgan said, and he believes it will only get worse once people get their new property tax bills.

Lubbers said that "nothing is more important" in the part of the district where both she and Morgan live than property taxes. It's why she has made the issue her focus "every day since the property tax bills hit the mail boxes" last year, she said.

During last year's property tax protests, many people who contacted Sen. Lubbers found her to be arrogant and indifferent towards their concerns. I know she has also been a disappointment to others within the party who thought she would stake out more socially moderate positions in the Indiana Senate like those of former Sen. Virginia Blankenbaker, the last female Republican legislator in Indianapolis who strayed from the far right's religious dogma. Instead, Lubbers votes down the line with Eric Miller on almost every issue, which is clearly out of step with many of the Republicans in her district. Morgan could also make an issue of how much money her husband socked away for their family's household as a six-figure paid media flack for Gov. Daniels. And remember that DNA testing lab Indianapolis Public Safety Director Scott Newman made bucco bucks helping to start up? Lubbers' husband, Mark, had a piece of that action as well. Strand Analytical Laboratories won a big contract with the Indiana State Police while Mark Lubbers was pulling down $126,000 a year as an outside consultant for Gov. Daniels.

May Primary Is The Election For Marion County Judges

The Star's Jon Murray explains in his story today about Marion County's judicial races why the May primary is the race for all practical purposes. He writes:

The May primary won't just set the stage for judicial elections in the fall -- it likely will determine who sits on the bench in Marion Superior Court.

Incumbents and other candidates who filed for the primary by Friday's deadline will take part in the true contest. Changes to state law in 2006 ensured that unless there are third-party candidates, everyone who makes it past the primary to the fall ballot will win.

Marion Superior Court has 16 judgeships up for election this year for six-year terms, and state law mandates that they be divided evenly between Democrats and Republicans.

That includes a new court that will be added in 2009, giving the Superior Court a total of 36 elected judges -- again, split evenly, with control of the court's executive
committee alternating between the parties every two years.

This is why Judges Gary Miller and Kenneth Johnson have decided it is just too important not to give voters a choice in the May primary, notwithstanding who party precinct committeepersons thought should be slated for these 16 positions. "My 18-year judicial career got tossed," Miller said. "I'm confident that come the primary, I'll lead the ticket." And he has good reason to feel that way. Recall that in 2006 Republicans nominated Ron Franklin for the 7th District congressional seat. Eric Dickerson ran against the slated candidate and a field of several other candidates and captured more than 50% of the vote, beating Franklin by a 2-1 margin. It's not the same GOP organization John Sweazey successfully ran years ago.

Murray also discusses the problem GOP candidate, Timothy Oakes. He writes:

One Republican candidate created controversy three years ago when he applied for an appointment from the governor to fill the outgoing juvenile judge's term. Timothy Oakes, now 43, killed a man while driving drunk when he was 17.

He later withdrew his name after protests from the family of the victim, Larry E. Morton. Oakes said Friday that his 2005 meeting with the family included a pledge ever to contact them again. He is qualified to be judge, he said, with broad experience including work in politics and as an attorney, a deputy prosecutor, a pro tem judge and now president and general counsel of the Indiana Cable Telecommunications Association.

"We try to live our life the right way and try to do the right things," Oakes said. "I think I've done so."

The story omits Oakes' well-publicized firing several years back as a deputy prosecutor by former Prosecutor Scott Newman. At least the voters will have the opportunity to decide what really matters when it comes to judicial qualifications. I know of no other place in the country where judges are elected that the winners of a party's primary automatically win a seat on the bench, which means that only those voters who vote in a primary can impact which judges are elected. And even on that point, they can only affect the outcome of the judges running within their own party's primary.

Why Lawmakers Don't Care What You Think

If you find your state representative or state senator unresponsive to you, then you need to run against them for that office. Unfortunately, despite voter anger over skyrocketing property taxes, most incumbent lawmakers will automatically be re-nominated by their respective parties in the May primary for re-election because nobody filed to run against them. Based upon the final filing list for candidates for the Indiana House and Senate, I've calculated that 77% of the incumbent legislators face no primary opposition. That means only 25 of the 108 incumbent lawmakers seeking re-election will have a primary opponent. While it is true that many of those incumbent legislators will face an opponent in the general election, most legislative districts have been gerrymandered to favor one party over the other, making it nearly impossible to defeat an incumbent in a majority of the legislative districts.

According to my analysis, House Democrats are getting off the easiest, while the Senate Republicans have the worst odds. Here is a breakdown by caucus showing the number of members with primary opposition versus those without primary opposition:

Senate Democrats (4 out of 6 have no opposition, or 66%)
Senate Republicans (9 out of 14 have no opposition, or 64%)
House Republicans (33 out of 44 have no opposition, or 75%)
House Democrats (37 out of 44 have no opposition, or 84%)

Judge Kenneth Johnson Files Against GOP Slate

Judge Kenneth H. Johnson has joined Judge Gary L. Miller in challenging the decision of GOP precinct committeepersons not to re-slate him for nomination to the Superior Court in the May primary. Judge John Hammel, who was also not slated last weekend by the GOP, did not file for the May primary. That means Republican voters will have ten judicial candidates from which to choose for the eight open slots on the Marion Superior Court. In a survey taken by the Indianapolis Bar Association, 82.6% of the respondents gave Judge Johnson a favorable recommendation, which is a higher rating than that earned by some of the other judicial candidates the GOP slated for the May primary. Democrats will have eleven judicial candidates running for their eight spots in the May primary. Also, Alex Murphy is challenging Louis Rosenberg, the Democratic slated candidate for Circuit Court judge, in the May primary. [Update: It looks like Alex Murphy has withdrawn. His name no longer appears on the list of circuit court judge candidates for Marion County]. Voters will have choices after all.

Ackles Withdraws From Coroner's Race

Kenneth Ackles has withdrawn his candidacy for re-election as Marion County Coroner after he was re-slated by county Democrats just last weekend. That leaves two Democratic candidates in the field, including former Chief Deputy Coroner John Linehan and Dr. Lloyd Frank, Jr. The Republicans nominated Dr. John Pless as their candidate for coroner. The Star's Brendan O'Shaughnessy has this online update on this new development:

Marion County Coroner Kenneth Ackles withdrew today as a candidate for coroner in the May 6 primary.

Of the two Democrats who filed to run for coroner before today's noon deadline, one was a former chief deputy coroner. John Linehan was fired by Ackles and later won a racial discrimination judgment that ordered the coroner's office to pay him more than $400,000 in damages. The other Democratic candidate is Dr. Frank Lloyd Jr.

The Marion County Democratic Party slated Ackles as its pick for the primary last Saturday. That same day, the Indianapolis Star reported that Ackles had failed to pass portions of a required training course mandated under a new state law.

Other controversies involving Ackles stemmed from his firing of the forensic pathology group hired to perform autopsies, and a police and prosecutor's office investigation following the theft by someone in the coroner's office of more than $3,000 from a body at the morgue.

On the Republican side, Dr. John Pless won the party's backing and is the only GOP candidate filed to run for coroner. Pless, a forensic pathologist, has been coroner in two other counties and also has performed autopsies for Marion County as part of an Indiana University teaching program.

Ackles was elected in 2004 and took office in January 2005. He is a chiropractor and the first nonphysician to hold the office in Marion County in more than 40 years.

Did House Republicans Kill Delph's Immigrant Labor Bill?

The Star's Bill Ruthhart's gives a good explanation of the complicated parliamentary maneuvering which took place in the House yesterday to control what happened to Sen. Mike Delph's legislation to crack down on employer's who hire undocumented workers. After the Democrats removed some of the more punitive measures within the legislation in committee earlier this week, they failed to hand down a committee report, which meant Delph's SB 335 died. Yesterday, the Democrats offered the watered down version of the legislation to another bill, SB 345, as a second reading amendment. This caught the Republicans off guard, who apparently wanted to go on an anti-immigrant binge and attach other, more punitive measures to the bill unrelated to employment. Suddenly, the legislation became all about immigrant bashing, which is exactly what Sen. Delph had been desperately trying to assure people his legislation was not about. The Republicans walked out, thereby bringing deliberations to a halt. House Speaker Pat Bauer had the House recess until Monday rather than adjourn, which will effectively kill attempts by Republicans to offer their amendments on Monday when the House returns. Here's part of the exchange Ruthhart shares in his story:

House Minority Leader Brian Bosma, R-Indianapolis, strongly objected to Bauer's decision, saying he broke the chamber's rules by not allowing GOP amendments. He accused Bauer of trying to kill the legislation, adding that his interpretation of the rules was "absolutely absurd."

"This is a cheap shot," Rep. Jerry Torr, R-Carmel, said of Bauer's decision. "There's times I'm ashamed to be a part of this body, and this is one of them."

Bosma said Republicans walked out so the matter could be delayed until Monday, when he said House rules would allow the GOP to offer amendments.

Bauer, however, placed the House in recess instead of adjourning after the Republicans refused to return to the chamber. Doing so, he said, would not allow Republicans to offer changes Monday.

Bauer accused Republicans of trying to push racist provisions. "We don't need a hate debate on this floor," he said.

Bauer said he acted within the rules of the House and said Republicans weren't trying to improve the immigration proposal, but instead "blow up" the bill.

"We didn't car-bomb anything," Bosma replied, noting that the proposal is still alive.
Republicans also denied their amendments were racist.

Delph said he was disappointed that politics in the House stalled his proposal and urged Republicans in that chamber not to expand the discussion on his bill from punishing employers to withholding benefits from illegal immigrants.

"They were trying to get other issues injected into this debate, and I didn't think that was appropriate," Delph said.

House boycotts are unusual, but not unprecedented. The last happened in 2005, when Democrats killed 130 bills in protest over proposals that required voters to show ID at the polls and created an inspector general for the governor.

Delph was obviously very disappointed at what House Republicans were trying to turn the debate into with their amendments. This is the same tactic the House GOP has employed successfully the last two sessions to kill hate crimes legislation--by offering poison pill amendments to prevent debate on the underlying proposal. As Ruthhart explained their amendments:

Some Republicans said Thursday they wanted to further amend and strengthen the bill by including provisions that would prohibit illegal immigrants from receiving state financial assistance for employment, college tuition and housing.

I think Sen. Delph will have a greater appreciation today of people's skepticism about his legislation. He may have sincere motives, but there are too many other legislators in the General Assembly who clearly want to stoke this issue for immigrant bashing purposes the same way they stoke the marriage amendment issue every year to bash gays.