Sunday, August 11, 2013

Ballard Proposing Yet Another Tax Increase

It's called a fee, but you pay it with your property tax bill and it's not part of the bill that is subject to the constitutionally-mandated property tax caps. Most residential property owners, 80%, will see an increase in the fee they pay for stormwater drainage from nearly 50% to double under a proposal the Ballard administration is sending to the council with next year's proposed budget. The proposed new stormwater fee increases are confusing, and the story by the Star's Jon Murray today does little to allay that confusion. Fee increases for non-residential property owners would go up 37%. Here's how Murray describes the proposed increases.
The fees are listed on property tax bills for about 300,000 parcels in the Marion County Storm Water Management District. The district covers all except Beech Grove, Speedway and Cumberland.
Under the proposal, the rate used to calculate stormwater fees for non-residential properties — owned by businesses, nonprofits, schools and local governments — would increase by 37 percent. But the effect would vary, with most paying more and a few paying less.
For residential owners, who all now pay $2.25 per month or $27 a year, the changing fees would vary from property to property, with most seeing increases. A minority would be charged less.
That’s because the city would change from the current flat fee to a rate based on the amount of surface area on a property that causes storm runoff — think roofs, concrete walks, driveways and parking areas. (The city already uses that variable method to assess non-residential properties.)
The upshot is that for two in 10 residences, fees would stay the same or decrease. For four in 10, fees would increase 47 percent, to $3.30 per month.
And for most of the rest, fees would nearly doubling, to $4.40 per month, though a small portion will see even larger increases.
Miser said she and others settled on a 20-year span of projects to strike a balance between finishing more of them sooner and raising fees too steeply . . .
But there's yet another kicker to these drastic rate increases. The proposal calls for automatic stormwater fee increases in the future pegged to the consumer price index. Nowhere in the article does Murray say how much is currently generated annually from the fees, or how much will be generated from the rate increase. Instead, he simply states that the current fees support spending of about $8 million a year currently, which the Department of Public Works says will drop to $3.5 million next year because the city relies on borrowing against future revenues from the fees to pay for the stormwater improvements. If the fee increases are approved, the City will be able to spend up to $16 million  a year on improvements. The fee did not even exist before 2001, and the story says nothing about what city ratepayers were told about the new fee when it was enacted at that time. The initial fee was nearly doubled in 2006. Murray's story makes some worthless statement about the fee being less than some other cities, but he should know by this point that's like comparing apples to oranges. Not all municipalities fund theses expenses the same way as evidenced by the fact that Indianapolis didn't even impose the fee until 2001.

As many of you know, Indianapolis has combined stormwater and sanitary sewers throughout most of the city. Indianapolis sold its water and sewer utility to Citizens Energy. Double-digit sewer and water rate increases have been commonplace over the past decade, and Citizens Energy has a 14% water rate increase and 50% sewer rate increases pending before the Indiana Utility Regulatory Commission. Murray's story says that Citizens only took over responsibility for sanitary sewers, while the City continued to have responsibility for stormwater sewers. It doesn't distinguish who is responsible where storm and sanitary sewers are combined, which is the case throughout most of the city and the reason why we are having to spend gigantic sums in the form of higher sewer and water rates to prevent sewage overflow into rivers and streams. Mayor Peterson's doubling of sewer rates and stormwater fees back in 2007 was all about providing new funding for about a half billion dollars for improvements to address these needs.

This is yet another pot of money that has been established for which there is virtually no accountability. It's an ever-escalating fee that has far outpaced the rate of inflation that is not counted in the city's regular budget. Mayor Ballard pretends it's not a tax increase because it's labeled a fee, but the bottom line is that it is pushing up your annual property tax bill on a line that doesn't count against the property tax cap. It's impossible for taxpayers to discern the difference in the additional rate increases they've been paying and are asked to pay for sewer and water, and this relatively new fee that is skyrocketing out of control. When the fee was established in 2001, we were told it was to help address a backlog of unmet stormwater drainage needs. Now we're told after spending all of this money over the past 12 years, we have a backlog of over $300 million in unmet stormwater sewer needs. The very same areas of the city that they claimed they would be able to address 13 years ago when the fee was first established still flood every time there's a big rain. Why? This fee increase is quite obviously being driven entirely by those who stand to be awarded handsome contracts to do the work who are making generous campaign contributions to the politicians. It will do nothing to alleviate flooding in areas of the city prone to flooding. If it would, there would already be results after all of these years of spending on the problem. Those areas flood because they're in a flood plain. Storm sewers do nothing to prevent flooding in those areas.


Pete Boggs said...

How is it "sustainable" that government insists on inflationary adjustments (guaranteed tax increases confused as "revenue") from its employer who enjoys no such guarantee?

Citizen Kane said...

Once instituted, fees always go up and the need always increases.

Besides the contractors benefiting, the developers of TIFFED projects will benefit as the money will be used for drainage projects related to their development - like maybe the one proposed on East Washington Street, between Parker and Oxford.

Citizen Kane said...

Also, the drainage improvements are needed in vast areas of what was previously (remember Belaluh Coughneour (sp.) of the Southside was the chief sponsor of the initial fee)under the jurisdiction of Marion County, where drainage was provided inadequately or not at all (of course, permitting the good-ole-boys to increase their profits) in areas, with very poorly draining soils. I happen to live in one of those so-called county subdivisions (although only six miles from downtown) and the few sewer drains that exist are incapable of handling water, because they sit higher than most of the land around them and there are no ditches. It would take untold millions of dollars to fix this mess. But, frankly, this is what makes this area more affordable than other nearby areas - we pay less because we have less - and I am not sitting around waiting for someone rescue me - but this fee was intended to rescue those who think someone should rescue them from the drainage nightmare they willingly bought into - which is a lot different than money spent to maintain existing infrastructure, which should be expected.