Tuesday, July 24, 2007

Raising Taxes Not A Profile In Courage

Something that really bothered me about last night's city-county council meeting was Councilor Joanne Sander's attempt to portray those advocating the passage of Mayor Peterson's 65% increase in the county option income tax as exercising some sort of profile in courage. "We have cut $83 million from the budget since 2003 . . . we're doing all that we can," she said. "I choose fiscal stability." "Political expedience is not in the best interests of the community at large," she added. After the vote, Peterson chimed in by thanking the councilors for having "the courage to do the right thing." But weren't those opposed to this latest tax increase abiding by a position Mayor Peterson advocated not so long ago? Let's look again at what he said in a state of the city address earlier in his administration:

Unfortunately, the part of the city budget that goes to cover police and firefighter pensions is the same part of the budget that pays for ongoing police and fire operations, including additional resources needed for public safety. We will meet our pension obligations, and we will also find a way to pay for the additional public safety resources we need. And it is important to do both without raising taxes. Raising taxes may sound like an easy answer, but if we want to avoid the urban death spiral that so many other American cities have experienced, we cannot give individuals and businesses an incentive to leave our city.

Raising taxes is the "easy answer" he told us. So what has changed? Mayor Peterson came to office as a member of the inner circle of Sen. Evan Bayh for whom he served as a chief of staff while he was governor. The Bayh administration took a hard line against raising taxes throughout his 8 years in office no matter how rough things got. After all, Bayh defeated Lt. Gov. John Mutz in his first bid for governor on an anti-tax theme, thumping the Orr-Mutz administration for massive tax increases. With Democrats shut out of the mayor's office in Indianapolis for decades, Peterson wanted to achieve the same electoral success Bayh has enjoyed and to achieve that success, it was critical that he not be perceived as another tax and spend Democrat. That's why he said what he did in 2000. He didn't believe Democrats could remain in control in Indianapolis without adhering to fiscally conservative policies.

A lot has changed since 2000. Democrats have captured control of the city-county council for the first time since the enactment of Uni-Gov, they have captured every countywide office save the prosecutor's office, and they now control most township governments. Emboldened by his own landslide re-election in 2003, Peterson and the Democrats became arrogant in their exercise of power. Incompetent cronies have been appointed to some of the city's most government positions. The consolidation of law enforcement has resulted in an even more-politicized and unaccountable police department. And Peterson and council Democrats have passed tax increase after tax increase, turning Indianapolis from one of the lowest-taxed cities in the nation to one that is now seen as a high-taxed city.

The arrogance of the Democrats was readily on display at last night's council meeting during the adoption of this controversial, $90 million increase. City-County Council President Monroe Gray's opponent, Kurt Webber (R), believes Gray and his Democratic colleagues "showed disdain for the public and their fellow colleagues." “I am downright shocked that public officials like Monroe Gray would actually conduct any meeting in such an unruly fashion, let alone one as important as deciding whether to increase taxes,” said Webber. “Gray and everyone who supported the increase showed such a disdain for the public and their fellow colleagues that I was ashamed to witness it.” Webber cites the council's refusal to allow public testimony at last night's meeting and their parliamentary maneuvers to stifle debate among councilors. "Very few decisions can affect as many constituents as a tax increase." "Monroe Gray and his Council leadership should have made this meeting an example of open debate. Instead, they did all they could to limit discussion and increase taxes as quickly as possible,” Webber said.

The actions of Marion Co. Democrats of late can only lead one to conclude that they believe they are politically invincible. They've made themselves believe that a political realignment occurred in the county, and they are safely in power for decades to come. I think they greatly under-estimate the discontent of voters in this county right now and the lack of confidence in their leadership. “If this is how Council handles one of its most vital votes in years, I have no confidence in its leadership that it has the confidence of the people or the character and demeanor to lead our city," Webber said. He's absolutely right. Marion County Democrats are in for a rude awakening this November.


Anonymous said...

Bravo! Bravo! I always enjoyed your well written perspective.

Doug said...

So, in terms of dollars, what does this tax increase mean to the average Marion County resident?

Also, is this COIT increase part of the new 3-pronged COIT option authorized by the General Assembly this past session, or is it a different flavor?

Anonymous said...

Here is the number that has been used many places: For a person earning $50,000 a year in taxable income, taxes will go up $325 a year.

Now, I guarantee you the working poor of this city are NOT making 50K. So as the paychecks get smaller on October 1 is the first time they will even ask what is happening.

We will be here to remind them who did what.

Unknown said...

I hope you're right about the voters remembering all this in November. I wish I could share your optimism.

Wilson46201 said...

There were two earlier well-publicized hearings about the tax in which the public spoke at length. Public testimony at full City County Council meetings is out of order. There was a partisan crowd trying to disrupt the meeting with frequent cat-calls and hooting. Democracy is not served well by intimidation. In such a disorderly atmosphere, calm discourse was made impossible. Gray kept his cool in the face of demonstrators and their chaos -- he kept the meeting proceeding as smoothly as possible.

Gary R. Welsh said...

Doug, The council did not use the newly-granted legislative authority to use the COIT increase to reduce taxes, although Councilor Nytes says they think the increase will allow the tax levies to be frozen for 2 years, but not even that is a guarantee. The council used the statute which allows them to use COIT tax revenues for public safety, pensions and criminal justice-related expenses. As I explained in an earlier post, the whole purpose behind Marion Co's original COIT back in the 1980s was to fund a pension trust fund. As the COIT raised over the years from 0.2 to 1.0, the council began raiding those revenues and using them for public safety and short-changing pensions. None of those increases solved the problem. At the same time, we saw property tax levies creeping up, food and beverage tax hikes, hotel tax increases, higher user fees, double-digit water and sewer rate increases and the list goes on. There is no reason to believe this tax increase will solve the problem anymore than any of the other tax increases did. Making matters worse, Mayor Peterson has increased the city's indebtedness by 1000% since he took office. Future generations will be paying for the excesses of this administration.

Gary R. Welsh said...

Wilson, I've watched council meetings where they have permitted public testimony at the full council meetings when it suits the chair. There is no hard and fast rule that says public testimony can't be offered at a full council meeting.

Wilson46201 said...

With such an unruly crowd, would it have been prudent to have even more testimony beyond that already given in two public hearings?

Anonymous said...

It is very sad that the all members of the CCC were not even given the chance to speak. When Dr. Borst asked to speak, King Ro called point of order, and shut down the floor. What a disgrace. When Dane Mahern was admonished for speaking up it confirms that if you were not willing to say what Bart, Frank, Gray and Sanders wanted you would not be provided an opportunity.

Welcome to the Peoples Republic of Indianapolis.

Anonymous said...

This tax uncrease will go where it was intended to go, to the Capital Improvement Board.
Please note that the CIB's budget IS NOT included in the regular budget.
How many millions off this increase will go toward that new hotel/condo project?
The $83 million that the Mayor said he saved was just shifted to other governmental bodies outside of the Mayor's budget.
It's about time to shut down the CIB slush operation.

indyernie said...

"There was a partisan crowd trying to disrupt the meeting with frequent cat-calls and hooting. Democracy is not served"

Wilson, which cartoons were you watching?
"Partisan?" Some who “catcalled” were wearing “Ditch Mitch” tee shirts while protesting a week earlier. Democrats, Republicans and Libertarians were all in attendance Monday night. Maybe if you had made an appearance at protest or two you could contribute intelligently. Get it right or keep your mouth shut.

Anonymous said...

The problem is that some of their opponents are also worthless. Look at who is running again against Moriarity-Adams - city employee and former councilor.

Anonymous said...

The lie is that there is 'fiscal stability' in a tax hike. There is NO FISCAL STABILITY IN A TAX HIKE. The only thing that does is push back the day when the system collapses.

The only way to fiscal stability is to truly get spending under control. That means cutting waste, sure. But more importantly, it means managing the pricing of contracts. My sense is that every contract let by the county OR state is way over priced.

On top of that, there's the 'fine example' of the concrete price-fixing scandal. The perpetrators continue to get their contracts in spite of their nefarious deeds. Go figure!

Anonymous said...

Gary, you're are incorrect re: this COIT increase. It was specifically added by the GA this year and DOES require a freeze in property tax levies at the rate they are at in the current year for the next two years. It was all part of HEA 1478. Marion County would NOT have been able to go above the 1% COIT without this bill. This has been poorly explained by the media and the Peterson administration. It also had to be done by August 1. That is in the code, there is no negotiating with the state for an extension. It happens by August 1 or it doesn't go into effect for that year. So, the Star's wish for it to be "slowed down" was not possible under the statute as written.

Frankly, I expect better research and analysis from you amd a better explaination from the Peterson administration.

Gary R. Welsh said...

With all due respect anon 7:33, the Star does reference the August 1 deadline in its editorial today. You neglect to mention the state also gave Marion County the option of using the COIT to partially replace property taxes; it chose not to do this. The state had also earlier advised Marion Co. to consider the COIT to replace lost business inventory tax revenues. It chose not to. As for the 2 year freeze in property tax levies, it was Councilor Nytes who said it was their hope the COIT resulted in a freeze in the property tax levies for at least 2 years. As it stands, they don't even know what property tax assessment base they have levying against since the state ordered a reassessment. The fact is there was a lot of operating in the dark on this one, which ensures the making of bad public policy.

Russ said...

Wilson, it's probably a good idea that there was a partisan crowd in the audience to counteract the partisan crowd up in the "Hollywood Squares" boxes. Throw in Paul Lynde, and the council meetings would truly be a joke then.

Doug said...

I briefly knew a lot about the COIT authority granted to municipalities by this past General Assembly. The DLGF has a short summary here.

I no longer understand it as well as I once did, but my understanding is that it provides 3 prongs, prong #3 is public safety and requires adoption of prongs #1 and #2 before #3 is an option. (#2 can be adopted without #1 and vice versa).

Prongs #1 and #2 both have to do with raising county option income taxes and using the money to reduce property taxes. Prong #3 can be used to pay for public safety.

If, as Gary suggested, Marion County is raising its county option income tax under other authority, then it doesn't necessarily come with any property tax benefits. If, however, it is done under the authority provided by HEA 1478-2007, I think by state law it has to be associated with property tax relief.

Anonymous said...

"The only way to fiscal stability is to truly get spending under control. That means cutting waste, sure. But more importantly, it means managing the pricing of contracts. My sense is that every contract let by the county OR state is way over priced."

Yes, when was the last time we opened up every single contract in the city to be bid by new vendors? From what I hear lots of people inside city government directly benefit from the award of city contracts paid for with our money.

Great point, Bartlies.