Tuesday, June 21, 2011

Games with COIT, LOIT, PST and Library Funding

I don't know what actually takes more slight of hand, the movement of dollars from one fund to another that are said not to be possible, or the explanation of why it can't be done in similar situations.  Fully funding the Indianapolis-Marion County Public Library is a prime example of this slight of hand.

Just last year, the City-County Council filled $1.0 million of a $1.8 million shortfall, with money laundered from the Ameriplex TIF District - money that had been sitting in the TIF District fund to act as a reserve to satisfy bond holders.  At the time, Councillors like President Ryan Vaughn, stated that they could not cover the remainder of the Library's shortfall with money from the Consolidated Downtown TIF District, even though it was exactly the same type of situation and even though they had just managed to pull $8 million a year from that TIF to pay more money to the Pacers.

Earlier this year, with much show and fanfare, the Council passed a resolution urging the Indiana State Legislature to grant them the power to send some County Option Income Tax revenues to the Library in future years.  The Legislature indicated that the City already had that power, but reaffirmed it with new legislation.  Now that the City and the Council has that power, Councillor Vaughn and others are making noises that indicate they will not split the COIT revenue with the Library anyway.

IBJ reporter, Francesca Jarosz, has a good article in the current IBJ that goes into the COIT - Library - IndyGo funding issue pretty well.  I agree with Councillor Jackie Nytes' position, captured in the final two paragraphs of the piece:
Jackie Nytes, a council Democrat, said giving the library even a small share of income taxes this year is important in setting a precedent.

“We recognize there is a need as a show of faith to find a way to begin that sharing of income taxes,” Nytes said, “even if the initial allocation may be more symbolic than substantive.”
I decided to look at the 2011 City-County budget to see where the City and County income tax money was going, just to see what I found.  I looked at the budget breakdown "2011 Council Adopted Revenues by Subobject by Fund" and "2011 Council Adopted Revenues by Fund by Subobject".  Click here for page with links to a variety of ways to dissect the budget.
But, first, a step back to explain that there are three separate taxes revenue streams that combine to total all of the income tax collected in Marion County.  There is the County Option Income Tax (COIT).  There is the Local Option Income Tax Property Tax Make Up (LOIT).  There is the Public Safety Option Income Tax (PST).  Some will tell you that the PST is dedicated to public safety an cannot under any circumstances be used for anything else.  But, that is not the case and in 2010 it was in fact redirected for use anywhere on anything to benefit the final City-County budget both in 2010 and in 2011.
In 2010, $21.1 m of COIT money and $13.3 m of PST money were put into the County Rainy Day Fund, where they were essentially laundered so that they could be used for any expense.  $17.3 m was transferred out that year and $17.5 m transferred out to benefit the entire budget.
So, for just 2011, how is COIT, LOIT, and PST being spent?
Fire fund -- $40.4 m
IMPD fund -- $79.2 m
County General Fund -- $6.4 m
MECA fund -- $6.8 m
Consolidated County fund -- $2.6 m
Parks fund -- $2.1 m
Redevelopment fund -- $55 k
Solid Waste Collection fund -- $3.1 m
Fire fund -- $8.8 m
IMPD Fund -- $4.8 m
County General Fund -- $13.9 m
Public Safety Income Tax fund (from City's take of PST) -- $29.9 m 
Public Safety Income Tax fund (from County's take of PST) -- $20.6 m
These funds are then the sources of money that go into each departmental budget.  The grand total of income tax revenues for the City-County in 2011 comes to $218 million.  Surely the Library is important enough to the powers that be, regardless of party, to send less than 1% of the income tax revenue to help make Indianapolis a great place to live.
But, somehow I expect there will be more slight of hand trying to explain why COIT, LOIT, and PST cannot be shared with the Library than prestidigitation in making it happen.

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