Saturday, February 09, 2008

And The Fleecing Of Center Township Goes On

The IBJ's Peter Schnitzler returns with another in-depth story of how Center Township Trustee Carl Drummer rakes in millions in tax collections each, while delivering only a small percentage of these amounts to needy citizens in the form of poor relief and maintaing huge cash surpluses in excess of an entire year's budget. Schnitzler writes:

When the inner city’s neediest residents grow desperate, local government offers them one last resort.

At an aging building at 863 Massachusetts Ave., they pass through a metal detector and wait in line to show a clerk their identification and copies of overdue bills.

Center Township Trustee Carl Drummer sometimes helps. The Trustee’s Office received an average of $6.9 million each of the last seven years, mostly from taxes, to provide poor relief—now known as township assistance.

But only about $2 million reached the penniless each year, with much of the difference covering administrative overhead.

Drummer has hoarded the rest as a shield against unspecified future needs.

Parked in a series of money market accounts, the surplus at the end of 2007 stood at $7.1 million—more than the office brings in annually to handle poor relief. Since 2001, the reserve has ranged from $4 million to $10.4 million, depending on expenses.

That’s an enormous cash cushion, and one the trustee’s office isn’t eager to publicize. IBJ discovered it by poring over public records dating back to 1994. An analysis of the financial records showed that Drummer and his predecessor, the late Julia Carson, built the reserve over the last decade and a half by collecting far more than they spent in a handful of years and banking the remainder . . .

In addition to the hefty surplus, Center Township has amassed a $10 million portfolio of underused properties for future redevelopment.

The Kernan-Shepard Commission has wisely recommended the elimination of township governments as part of its sweeping recommendations to reform local government in Indiana. Upon being shown the IBJ's analysis of Center Township's finances, State Rep. Phil Hinkle called the situation "absurd" and "unbelievable." You cannot justify in my mind the validity of overcharging the taxpayer consistently,” said Hinkle, ranking Republican member of the House Local Government Committee. “One or two years in a row? OK, I can see it happening. You make adjustments. But you don’t consistently over-bill the taxpayer.” One other key lawmaker, however, has apparently been won over by Drummer. "After a recent tour, Republican state Sen. Jim Merritt of Indianapolis removed township trustees from legislation he introduced to merge local government offices in Marion County," Schnitzer writes. "He called the Center Township Trustee’s Office highly organized, and said he had the impression Drummer is attempting to lower costs." Schnitzler adds, "But Merritt admitted he hasn’t attempted to scrutinize Drummer’s finances." Gee, thanks for nothing Sen. Merritt.

The Center Township surplus had exceeded $10.4 million as recently as 2003, but Drummer has now begun to spend it down rather than give it back to the taxpayers who were over-taxed in the first place. Don't dare question Drummer's handling of township finances Schnitzler warns. "Drummer generally has a friendly demeanor. But he becomes irate at the suggestion that reorganizing trustees’ offices would offer more help to the needy," he writes. “We’ve given shirts off of our backs. Literally,” Drummer said. “Coats out of our closets. Literally.” You're real funny Carl, real funny.


Anonymous said...

Over-taxation is hardly a modern trend, nor is burying financial realities within volumes over overwrought bookkeeping. The question is: where is this money going? If an approximately $4 million gap is being spent annually on administrative costs, what's the breakdown? And how does an administrative entity designed to relieve poverty cost twice as much annually as the actual relief?

Sean Shepard said...

The vast surplus here brings up an interesting thought. Why not let it continue to build up until such time as the interest off of the whole sum could be used to fund the annual budget.

The idea of "endowment government" is one that I don't think we explore often enough. Essentially, in this case the entire process could be privatized into one that accepted private donations, could sustain itself off of the interest (by preserving and continuing to increase principal to keep up with inflation) and would be removed as a taxpayer funded line item.

The only thing to resolve would be one of adequate oversight and with checks and balances to prevent abuse or squandering of the treasure.

This same idea could be applied to many areas of government (parks and recreation would seem to be a possibility).

I'm not sure I'm sold on the idea presented here, but I think it is absolutely worth some conversation.

Anonymous said...

I have to give it to the IBJ. They are not afraid to roll up their sleeves and get their hands dirty when it comes to searching and, being the only game in town, to write about the truth. Even more reason to cancel the Star and subscribe to the IBJ.

Anonymous said...

Someone please post Merritt's phone number. We need to apply a little pressure. Drummer's a crook and if Merritt doesn't see it that way then he needs a little insight.

Anonymous said...

The story brings to light the fact that we need to ELIMINATE township government.

*People are being taxed to put money in the bank, millions of dollars that belong in the pockets of taxpayers.

*People are being taxed to maintain an outrageous political patronage payroll of almost 100 employees!!!

*72% of this Trustee's budget is for his patronage payroll/administrative costs!!! That's right 72%! This fact alone is reason to ELIMINATE township government; it's a model of inefficiency and patronage!

*This trustee has put a bar inside of a township building! That's an outrage. Government is not in the business of taxpayer funded landlord/party center.

*He has 3 giant office buildings, one of which was a former YMCA and is now a "wellness center." (Just what part of a Trustee's duties under state law are to build/maintain such "wellness centers?"

*He drives a township car equipped with illegal flashing lights/siren.

One thing Carl Drummer has obviously forgotten is that the money in his budget is TAX money, that people have worked hard for and earned. They should not be giving up their money so he can build a fiefdom of political patronage!

Carl Drummer is taxing us money that should NEVER have been taxed out of our hands.

Anonymous said...

Here's how the Merritt "flip" probably occured:

The single largest vendor for Center Township government, is probably Ice Miller. Someone has to lawyer-up all those investment properties and do the routine legal work for a lazy Corvette-collecting trustee.

Merritt is a lawyer. Who does a lot of business with Ice Miller. I'm betting he was reminded how much business. It would certainly not be the first time it happened.
IM, you recall, represented both sides of the original Lawrence water company deal, and when questioned about it, they indicated that one side of their representation was merely providing "scrivener's notes."

Which has become a huge belly-laugh among local lawyers with integrity.

And Sean just showed why he should never be elected to anything. Endowment government? Are you freaking nuts? Is this the Libertarian way?

Gary R. Welsh said...

Drummer does pay Ice Miller at least $10,000 a year to lobby for Center Township at the State House. Yes, he's spending our money to save his own job. Merritt, however, is not an attorney. He owns a large travel agency.

Sean Shepard said...

No 4:51. Endowment NON-government. If you want to have a serious discussion on the pros and cons, which is all I suggested is that it is worth a discussion, than come out from behind the "anonymous [ie:I'm afraid to go on record or advertise my partisanship]" heading and let's have a serious discussion on how to downsize government and still fund things that are important to people.

There are lots of things that should or could be handled by private organizations and charities and endowments are often a great way to fund those. Certainly those are better options that taxpayers paying for the very situation that is mentioned in this original post!

Anonymous said...

First, "endowment government" would require transfering large sums of wealth to a government that is more often than not reminiscent of the Mafia. That money would *disappear*.

We got raked for $600 milion to build the Colts a new stadium, before the old one was even paid off, so no, thank you, I don't trust government cronies.

Second, this is a real good example of a quandry in race relations. Clearly this man is not looking out for anyone but himself.

Third, township government is NOT the problem, it's criminal activity and overspending. We had the exact same number of townships and school systems 50 years ago, but then everybody got greedy and the ruling class became criminal.

Sean Shepard said...

Large transfers of wealth to government?? Like 30%, 40%, 60% of what we all earn... ooops, already happening. ;-)

I understand the concerns you're mentioning regarding cronyism and corrupt government. We rail against it when it happens in the corporate world but then somehow expect the largest corporate like structure (government) to somehow be immune.

This is one of the reasons that shrinking the size of government and getting them out of all of our business is important.

I still think the endowment idea is worth consideration. Imagine shuffling something like county or township poor relief into a private (public-private partnership?) entity with some kind of acceptible oversight. Allowing private donations to help fund it and then being able to cover everything with just the interest instead of taxing people.

It might take a decade to complete the migration and have enough in the fund. This is just one idea, but clearly a better alternative to eternal taxation.

Anonymous said...

Sean, I am fully aware of the endowment argument. Read a lot about it. It's one of the silliest notions I've ever heard.

And the anonymous label isn't because of you, but due to more than one blogger or reader, who seem to seek retribution against persons with opposing views. It's happened, and some of us have jobs, families, etc., to protect. Publishing a poster's name does not lend more or less credibility to the post--evidence, Wilson.

So, anonymous it will stay.

For now at least.

Sean Shepard said...

Okay, "silly" is not an argument for or against. I'm sincerely interested in the actual argument against and why you think it is "sillier" than infinite taxation.

Do you also think the (private) United Negro College Fund is "silly"? That's an Endowment. There is also a very small town in Kansas that funds $110,000 in scholarships from a public Endowment that was started in the 1980s. Granted, I wouldn't go for "endowment military" I don't think, but parks and recreation, funding for the arts and maybe education, why not?

Seriously, give me reasons not labels like "silly". ;-)

ALSO, you do realize that our original Indiana Constitution established for corporate property taxes to fund an endowment that was to be used for the public school fund? (Article 8 Section 3).

As for the anonymity and the concerns your cited, I can appreciate what you said and chuckled at your Wilson analogy.

Anonymous said...

3:01 said it best: "One thing Carl Drummer has obviously forgotten is that the money in his budget is TAX money, that people have worked hard for and EARNED. They should not be giving up their money so he can build a fiefdom of political patronage!

Carl Drummer is taxing us and, after reading this story we now know, money that should NEVER have been taxed out of our hands."

That money could have been a vacation for my family, instead of a crony's paycheck for a make-work, do-nothing job at the Center Twp Trustee office.