Thursday, March 31, 2011
Friday, March 25, 2011
Kenney piece, "Indianapolis' Job Figures May Not Always Add Up", aired last night.
Indianapolis' job commitment claims may be more wishful thinking than reality after a six-week investigation of claims made in January by Mayor Greg Ballard and Develop Indy, the city’s economic development arm.Kenney interviews Mayor Greg Ballard and Develop Indy's President, Scott Miller. Develop Indy is the new name for the old Indianapolis Economic Development, Inc. Just last year, this group was the beneficiary of $3.5 million of tax money given to them by Mayor Ballard. This was part of the $5 million "clawed" back when Navistar did not live up to its job creation targets agreed to as part of its property tax abatement agreements (see "Abatements - Scary Loopholes Need Closing"). Also, Develop Indy pays for Mayor Ballard's numerous trip abroad.
In January, the city announced that it had secured 8,737 new job commitments from 73 companies in 2010, touting the number as the highest number of new job commitments in a decade.
6News' Kara Kenney found that less than a quarter of the commitments are enforceable.
Twenty-two percent of the now 72 companies have a written agreement with Indianapolis to receive tax breaks, meaning that the city can hold the company accountable if the jobs don't come to fruition.
That means that 1,634 of the more than 8,700 job commitments have a written agreement with Indianapolis. Twenty-two of the 72 companies have no written agreement at all with the city or state.
The written agreements that Kenney refers to, are property tax abatement agreements. An abatement is a deal where the City forgives a fraction of the property taxes a company owes for a fixed period of time (usually between 5 and 10 years). These agreements anticipate that the company will be investing new money in new real estate or buildings and/or creating new jobs. The increase in value of the property due to the company's new investment, is the target of the abated taxes. For example, if Company XYZ intends on adding a building to its corporate campus, then they can ask the City for an abatement on the taxes that will be due on that one new building. The City and Company XYZ would agree to specific targets for the amount of money to be invested and the number of new jobs to be created.
The City's standard abatement agreement contains what is called a 'clawback clause'. This clawback clause says that if Company XYZ does not invest the agreed to amount of money on the new building and/or it does not create the targeted number of new jobs, then the City can get the owed taxes back as a penalty.
Unfortunately, as far as I am concerned, sometimes the City does not insist that new jobs be added, and instead clings to the number of old jobs to be retained.
From time to time, Develop Indy will send a representative to a City Council committee meeting, to tell the Councillors just how rosy the future looks for Indianapolis. They cite the number of jobs created in the recent past and the prospects for job creation in the future. They almost never report on the number of jobs lost, so the Council does not get a good look at where the City really stands and what its true prospects are. This is more than unfortunate, given that Council actions need to be grounded in reality and supported with accurate and fulsome data.
Kenney has waded into the obtuse world of jobs numbers. Sometimes the Mayor refers to new jobs promised, which seems legitimate. Sometimes its new jobs promised plus jobs promised to be retained. Then, you add Develop Indy's numbers of jobs discussed - not promised, and you have the very fuzzy math that adds up to fictional forecasts of Indy's job prospects.
Kenney also interviews Morton Marcus who has the most intelligent things to say:
"Public officials want to make themselves look good. They want to make their administration look good, and they're going to use every device they can, short of outright lying," Marcus said. “The numbers tend to be, I wouldn’t say imaginary, but hopeful. Sort of like a Christmas wish list.”and
“I think the public should be careful about believing every press release that comes out of the mayor’s office or governor’s office, no matter who the mayor is or governor is,” said Marcus.
When it comes to jobs numbers, especially in this current economic recession, it sure would be nice to have an accurate picture of where we actually stand presented once in a while; and, not fictitious numbers all the time.
[edited to add: while I was writing this up, Paul Ogden posted on the same Kara Kenney report over at OgdenOnPolitics]
Monday, March 21, 2011
Going back to the proposals I mentioned were being introduced at the Council's last meeting, this is where those proposals stand:
Prop 46 -- Would approve a property tax installment plan for those who have homestead property in Marion County. After approval by the Council, the State Department of Local Government Finance would also have to approve the plan. Mike Rodman, County Treasurer, drafted the plan. The plan would be voluntary, and presumably appeal to those homeowners who either have no mortgage, or those whose mortgage company does not escrow funds for property tax payments. Passed out of committee 4-0 and will be voted on by the full Council this evening.
Prop 47 -- Would establish a $100 cash fund so that the Assessors office could provide change to those who make small, cash payments for services. Passed out of committee 4-0 and will be voted on by the full Council this evening.
Prop 77 -- Would give $2 million to the Indianapolis Parks Foundation for crime prevention grants. I assume that most, if not all, of this amount would be passed on to crime prevention grant awardees. But, the proposal as posted online, does not specify how much of this money is intended to be used by the Foundation for administration and evaluation of the grantee projects. Passed out of committee 5-0 and will be voted on by the full Council this evening. [edited to add: Jon Murray, IndyStar reporter, notes "That work comes at a cost: The foundation will use $140,000 of the $2 million for administrative costs, including contracting with a program evaluator. An additional $93,000 will go for training public safety employees to work with community-based crime-prevention programs. That leaves about $1.8 million for grant awards."]
Two other proposals have not made it through committee yet:
Prop 52 -- Would amend the sign ordinance to allow two types of signs on IndyGo bus shelters and City-owned benches at bus stops - advertising signs and transit related signs. It is hoped that more bus shelters would be erected to City specifications by firms interested in selling ads for the City, and that the ads would bring in some additional revenue for the always struggling IndyGo.
Prop 62 -- Would add licensing requirements and regulation of flea markets into the ordinances.
Of those being introduced tonight that caught my eye, quite a few are related to public safety. Councillor Ben Hunter, Chair of the Public Safety Committee, is sponsoring a number of those.
Prop 82 would require permits for police escorts for professional sports teams. The permit fee is $775 for up to 4 vehicles (with one bus being counted as two vehicles) and $75 for each additional vehicle to be escorted. Interestingly enough, there are two caveats imposed -- first, no tax dollars can be used to pay the fee, and, second, the CIB may not pay the fee on behalf of the professional team. Prop 82 also creates a Law Enforcement and Equipment Fund. The permit fees noted above, would be used to put money into this Fund. The Fund could be used for the Traffic Branch of IMPD.
Prop 83 would amend the part of the Ordinance related to IMPD Reserves. It would add the requirement that to be eligible, a person must reside in Indiana. It strikes the current requirement that one be under 65 years of age and eliminates a mandatory retirement age of 70. It imposes an employment background check and it shifts a variety of decisions from just the Chief of Police to both the Chief and the Public Safety Director.
Prop 86 would shift current MECA duties to the Public Safety Director. This issue came up during the last budget season. Mayor Ballard's budget moved MECA's money to other areas. Quite a few uniformed firemen showed up to that particular budget hearing. Councillor Hunter assured all that there would be amendments to the budget that returned everything to status quo, which he did do. Now, it appears, some deals have been struck. This could be interesting.
Prop 84 has to do with the police merit system, but is not being sponsored by Councillor Hunter. Instead, Councillors Vernon Brown, Monroe Gray, Brian Mahern, and Maggie Lewis.
This proposal changes the appointments to the Fire Merit board - reducing from 4 to 3 appointed by the Director of Public Safety, adding 3 appointments by the Council, increasing from 2 to 3 the number appointed by the firefighters. New restrictions for eligibility are that a person may not have run for political office before, nor may they be related to an employee of IMPD or IFD or a contract service provider to same. The political party affiliation of the appointees is balanced and there is a new requirement that one of the appointees of the firefighters be a minority or woman firefighter. The rules for hiring and promotion would be altered to include points for residing in Marion County and having graduated from a Marion County high school, or residing in Marion County for the last 10 years.
Similarly, the Police Merit Board appointments would be changed in an identical manner. The decision to employ an applicant would change from the current decision by the Chief to a bit more cumbersome decision process -- the Chief would select the first 80% of candidates based on score on the eligibility list and the final 20% could be any candidate on the list, regardless of score. Residency in Marion County and graduation from a County high school, or, 10 years of residency in the County shall be considered in hiring and promotion decisions.
There is one non-public safety proposal that also caught my eye. That would be Prop 79, which would authorize the issuance of $65 million in Indiana Waterworks District Net Revenue Bonds. Interestingly enough, in late February, Fitch Ratings downgraded Indy's Waterworks bonds to "A" from "A+". I am still slogging through the rational, but feel free to review it and tell us all what it means (Business Wire report posted here).
Tuesday, March 15, 2011
Besides its headlong rush to vilify unions and gut collective bargaining, the Legislature is pushing bigoted anti-GBLT and anti-Latino bills through. I do not know if Governor Mitch Daniels has to sign these bills in order for them to become law. That certainly is a significant question.
HJR 6 seeks to put discrimination into the Indiana State Constitution by banning same sex marriage or civil union, partner benefits, and anything else that can be interpreted as being 'substantially similar to marriage'. This bill passed the House prior to the Democratic Caucus' self-imposed exile to Urbana, IL. There is a Senate Judiciary Committee hearing on this bill scheduled for tomorrow, March 16, beginning at 9 am in the Senate Chambers. If it passes this year, it must pass again in either 2013 or 2014. If it passes through the General Assembly a second time, it would have to pass a vote of regular Hoosiers through a public referendum, for the Constitution to be so amended.
SB590 seeks, among other things, to require Indiana's police to ask for proof of legal residency from anyone they 'suspect' could be here as an illegal alien. It is doubtful that a Canadian accent would be deemed sufficiently suspicious. A Spanish accent, however, would certainly qualify the speaker for unconstitutional requests to produce proper papers or be detained (aka, arrested), until such papers could be produced. This bill passed the Senate and has been referred to the House, where the Democrats are in exile.
While I tend to believe that the human rights, the civil rights, and old fashioned decency are enough reason for these bills to be defeated, others bring up economic costs to the State should these bills be enacted.
Gay bashing laws tend to make States less inviting to a very talented and upper income population. This impacts the ability of companies to attract and retain valued employees. This impacts the decision of companies to locate or expand or remain in those States.
Latino bashing laws tend to make States less inviting for tourism; a consequence clearly seen in Arizona. Increased costs for policing efforts are said to be significant and ill considered in this economy at any price.
While the push for these hate-filled laws is illuminating the radical agenda of the Republican controlled General Assembly, these are not issues that attract complete Republican support. There is significant Republican antipathy to both of these bills. This fact alone makes it incumbent upon those Republican Senators and Representatives to do all they can to kill these hate bills.
The Democratic Caucus exile can help with SB590 - but for how long? Additionally, influential Senator Luke Kenley is now asking for amendments, which is a positive sign, but may not mean much to House members who now control that bill.
Thus far, HJR 6 doesn't have any high profile Republican Senators pushing against it. That is a travesty and does a huge disservice to Republicans in the general public who do not support this attack on themselves, their friends, or their family members who are gay or lesbian.
All of the majority's radical agenda is alarming for another reason. While control of the House swaps back and forth from year to year, control of the Senate does not. Should any piece of the radical agenda be passed, it will be years, if not decades, before a Senate could be voted into office that would allow a bill reversing the hate to be considered.
If there ever was a time to call your Senators and Representatives, it is now. Stand up and be counted if you oppose Indiana rocketing to the bottom, to be known and codified as the 'Hate State'.
Monday, March 14, 2011
If you grow a garden, consider putting in one more tomato or zucchini or one more row of plants and donate that produce to your local food bank or senior center. Just one more. It helps us connect with others and it provides some of the best darned, tasty ingredients for others to enjoy along with us gardeners.
Think about it.
Saturday, March 12, 2011
Friday, March 11, 2011
Indiana is in fiscal crisis. Education funding is being slashed while social services and unions are under severe attack as an excuse to save money. Indiana’s roads are potholed like Swiss cheese, 4000 bridges are structurally deficient or obsolete and now we hear that sidewalks around the state are crumbling. Meanwhile, huge sums of cash are being pumped into one project—I-69.
The state plans to spend over $3 BILLION on a highway that will destroy thousands of acres of prime farmland, bisect a major wildlife refuge, divide rural communities, fragment large forests, condemn over 400 homes and relocate or destroy around 125 existing businesses. Something is seriously wrong with this picture.
Indiana’s priorities, led by Governor Daniels, are distressingly warped. The reason that a hugely expensive highway is so important that it can siphon money from transportation projects across Indiana while vital services are being cut is clear--POLITICS.
If you think there are better ways to spend $3- $4 BILLION than laying more asphalt while destroying Indiana’s valuable resources, please contact your state legislators and tell them – stop wasting money on I-69! Political self interest must not override fiscal, social and environmental responsibility. Indiana Deserves Better than I-69.
Submitted by Thomas Tokarski
Wednesday, March 9, 2011
I just want to pull a part of it over here for repetition. The bonds being used so that the City can 'loan' nearly $100 million to the developer, who only has to come up with $6 million of their own money, are called "Midwest Disaster Area" bonds. Gary has walked them back to their origin in Congress and finds that they MUST be used for, well, Midwest disaster relief. He cites the law thusly:
In the Heartland Disaster Tax Relief Act of 2008, Congress imposed the following specific requirement:
“[except that in determining whether a bond is a qualified Midwestern disaster area bond--paragraph (2)(A)(i) shall be applied by only treating costs as qualified project costs if -- in the case of a project involving a private business use (as defined in section 141(b)(6)), either the person using the property suffered a loss in a trade or business attributable to the severe storms, tornados, or flooding giving rise to any Presidential declaration described in subsection (b)(1)(A) or is a person designated for purposes of this section by the Governor of the State in which the project is located as a person carrying on a trade or business replacing a trade or business with respect to which another person suffered such a loss, and in the case of a project relating to public utility property, the project involves repair or reconstruction of public utility property damaged by such severe storms, tornados, or flooding…]"
and “such bond is designated for purposes of this section (on the basis of providing assistance to areas in the order in which such assistance is most needed).”
I have been following the No-So deal for a while and through a variety of legally required processes, including action by the MDC and the Council. This is the first I have heard that these bonds are dedicated for a narrow purpose -- a purpose that cannot be claimed for the No-So deal. If anyone has heard of anything regarding a City determination that the No-So area qualifies for disaster relief money, please note it here in the comments section, or contact me at email@example.com and I'll post the information.
What won't the Ballard administration do to get taxpayer funds into the hands of the well connected?
Monday, March 7, 2011
Part of the remedy being chased, appears to be the continued vilification of the very folks who were promised retirement benefits through negotiated contracts. Instead, perhaps, we should be looking at those who should have set enough money aside to fully finance the promises they were making to their employees.
That said, I am going to relate to you, some of the information I found on the web pertaining to all state's unfunded pension liability, but I'll pull out the Indiana information here.
Let's start with this nugget:
Joshua Rauh, Professor in the Department of Finance, Northwestern University, estimates that Indiana's State pensions could run out of money as soon as 2019 - eight years from now. Only Illinois and Connecticut State pensions are calculated to run dry before our State pensions are. And, this is predicated upon an 8% return on investment of the assets we have in those pensions.
To peruse Dr. Rauh's papers on this topic and others, click here, and as you see a title of an academic paper that sounds interesting to you, click the 'download' link.
As I reviewed analyses, it became clear that accurate base data were not available to any of the authors immediately. So, for instance, the Pew Center on the States published their analysis, "Trillion Dollar Gap", on the aggregate and individual State's unfunded pension liabilities in February of 2010, reporting on the conditions in 2008.
For Indiana, the Pew Center said that $9.8 billion (yes, with a B), was the unfunded portion of Indiana's pension liability. The total 'bill' as they noted it, amounted to $35.6 billion. They grade Indiana as a State where there should be 'serious concerns' about the unfunded liability.
Going back to Dr. Rauh's publications on the matter, I pulled a couple of data points over a couple of years. Dr. Rauh's data showed that in 2005, Indiana had a State pension liability of at least $29.2 billion, and had $19.5 billion in assets saved for the purpose of covering those obligations. By 2009, the Indiana State pension liability had grown to $37.3 billion, but the assets saved had grown to only $19.6 billion. The numbers for liability are the State's own estimates. Others, including Dr. Rauh and the Pew Center, say the actual numbers are much higher.
Here is the problem in a nutshell. At budget time, these pensions were not allocated enough money to be prudent.
This is just like in Indianapolis. Under Mayor Steven Goldsmith, the pre-1977 police and fire pension was not funded, creating a ticking time bomb. That bomb went off during Mayor Bart Peterson's term and ultimately cost him reelection.
This is just like here in the Decatur Township school district. I have blogged repeatedly about the district and its promises for high end retirement deals for administrators. Even though the State recognized the looming problem and tried to provide a fix for it back in the early 2000's, our Superintendent Don Stinson has continued to build unfunded liabilities, on top of the benefit promises that were fixed in 2003 and 2004.
The real problem has not been the unions that represent these employees. The real problem has been the unwillingness of elected officials to properly and prudently set aside enough money to fund these pensions as the employees retire. These elected officials made promises but did not back them up as they should have. Now they want to blame the folks to whom they made these retirement promises, instead of fixing the problem they created with insufficient budgets.
Now, I have no idea how to allocate the responsibility proportionately, as I haven't closely followed the State budgeting process. But, Governor Daniels took office in 2005, when our State's pension liability was $29.2 billion, by the State's own estimate. Within 4 years that liability had grown by $8.1 billion and we had saved only 0.1 billion more to fund that expansion. Governor Daniels submits the budget, but then folks like Representatives Brian Bosma and Pat Bauer, and Senators David Long and budget doorkeeper Luke Kenley, dive in and make changes as they see fit. What comes out is that they all bear responsibility. And we voters need to make sure that they fix this problem in a timely manner that doesn't put us all in the poor house.
2018 -- tick, tick, tick.