I don't usually 'do' twitter. I'm on a steep learning curve yet in that realm. Not to mention how I'm not prepared for such short notes. But an exchange between Matt Stone of IndyStudent blog 'fame', and Matt Tully of IndyStar 'fame' (and another man I don't know but very likely has his own arena of 'fame') caught my attention.
Tully was claiming that the 'small' tax increases since the property tax caps were instituted did not make up for the lost revenue. Stone disagreed.
Stone is correct. The short view is simple enough. The state took over more than $100 million in City/County obligations - Family and Childrens Services and pre-1970 police and fire pensions. The former was $99.6 M in 2007 and $107.5 M in 2008. I could not find numbers for the latter.
The tax caps give relief to the taxpayers. But, any taxpayer relief is equal to tax revenue that cannot be collected - referred to as 'circuit breaker' penalties. The City/County did not see any circuit breaker reduction in its property tax collections until 2009. That year the City/County collected $278 M in property taxes AFTER subtracting $26 M in circuit breaker penalties. The circuit breaker penalty has steadily grown, but so too has the net property tax revenue actually collected by the City/County. For 2014 it its expected that this unit of government will collect $306 M in property taxes AFTER subtracting $55 M in circuit breaker penalties.
This was not the only thing happening during this time. Let us not forget the reason Ballard was elected Mayor in the first place was because then Mayor Peterson raised income taxes for a new 'public safety tax'. The reason for this tax was to cover the pension obligation. Once Ballard was inaugurated, his fellow Republicans in the State Legislature agreed to take that pension problem off his hands - freeing up some $74 M in 2008. Total income tax revenues to the City/County have fluctuated mildly since then, running from $247 M in 2009 to $239 expected in 2014 - not much difference in the scheme of things.
With the Great Recession ebbing, income tax receipts and property tax receipts should be climbing once again as we move forward from here.
So, before you swallow the City's PR machine's woe-is-me, tax-caps-are-so-bad, line of bull, check out the real numbers.
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Unintended Consequences
8 hours ago
7 comments:
The thing is you have to look at the perception. Money just falls from the sky when it comes to TIF developments in some of the most well-off areas of the city, a 10 million dollar scoreboard, increased subsidy of professional sports, cricket stadiums, parking garages, and soon to come, a criminal justice complex that'll probably be hard to access to the public.
But when it comes to...you know, plowing and salting the streets? Providing toilet paper and office supplies to district police offices? Whoa, there's no money there for that. Gotta raise some taxes for that.
To me, there's an issue of priorities. If we fund the things we need and we still don't have enough, then let's have the discussion on how to fully fund our needs. But if we're pissing money away on cricket stadiums and ugly parking garages, then if the powers-that-be can find money for those, then they can find money for some salt trucks.
Exactly.
I might also note that the rise in circuit breaker penalty is due to the rise in TIF expansion. This is only bound to get worse.
Lately, too, the various taxing units have been having a brawl, each trying to cut their own circuit breaker penalty and tossing it to another unit.
Hmmmm the biggest concern is the AA bond rating! Ballard and company are still spending like it 1999! Isn't there one Kelly Business student on the payroll downtown? My nephews former girl friend (and KB student) said triple A was bad. I suspect AA would be bad bad and more bad. That's how the kids talk now a days isn't it? ;)
guy - Wikipedia lists AAA from S&P as the best rating possible.
http://en.wikipedia.org/wiki/Bond_rating
Thanks!!! I must be thinking about investment grade bonds! Or maybe it's a brain fart. Still double A is not good!
I don't do bonds much anymore - stick to stocks much better rate of return! With 3d printing (DDD) and Amazon and Google the newer tech stocks are hot! get a chance check out my post on 3D (DDD) it's going to the moon!!!!!
http://guy77money7.wordpress.com/
disclaimer: You want a 3 to 5 year time horizon on any ground breaking technology! Yes I do own DDD, google and Amazon Later ;)
i agree with indy student.
what ties together the property tax issue and the bond rating is that indy residential property is way over assessed, much more on cheap houses. to stave off the inevitable decline in assessments, and to keep up the subsidies for pro sports and hotels, marion county is 6 YEARS behind in reviewing property tax appeals.
theres a huge backlog of appeals. the county processes as few as one a month. its so slow cause the county hopes people give up, or move. it's so bad the state changed the law so appelants can go straight to the Indiana Board Of Tax Review if the locals take > 180 days.
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