Ballard Tax Revenues About $100 Million More Than Peterson Had

What can you say about the Ballard Administration's request to drop the local Homestead Credit (increasing taxes on most property owners and foisting higher circuit breaker penalties on schools, IndyGo, and the Library system), increase County Option Income Taxes, and a new proposal to increase the stormwater drainage fee to property owners - when Ballard's combined property and income tax revenues have been $70 million, $100 million, and more, than Peterson enjoyed in his last two years in office?  Why, you have to wonder where it all went. 

The spate of proposed tax and fee increases sent me to City budget documents to pull out the property tax and income tax revenues enjoyed by the City/County government from 2006 through 2013.  These numbers are 2006 actual, 2007 actual, 2008 actual, 2009 actual, 2010 actual, 2011 expected from the adopted budget, 2012 expected from the introduced budget, and 2013 expected from the adopted budget.   Circuit breaker penalties began in 2011 and are reflected in the revenue numbers listed below.  In 2012, the State returned $46.6 million in additional income tax revenue to the City, for errors in 2011 and 2012 - this windfall is accounted for in 2012, as that is when it was received.

 

 

 

 

Peterson's last two years in office were 2006 and 2007.  He increase the income tax by instituting a Local Option Income Tax (to reduce, somewhat, property taxes) and a Public Safety Tax, with the expectation that he would hire 100 additional police officers and handle the ever-growing pension obligation.   So, he handed Ballard an enriched budget.  In fact Ballard has enjoyed combined property and income tax revenues $70 million to $100 million more than his predecessor.  In 2010, I do not know what happened, but there was an additional windfall of about $150 million.  One also has to note that in 2009, the State took over a number of expense obligations; the aforementioned pension being one, and a $100 million annual obligation for the Family and Children's Fund that was supported by property taxes, being another.

 

The new City Controller, Jason Dudich, anticipates an additional $20 million in tax revenues for 2014.

 

The City is also just sitting on $80 million in a 'stabilization fund', that could help us eke by with 'only' $20 million more.

 

The revenue impact from tax caps, much focused on by the Ballard Administration, was easily compensated for by Peterson's income tax increases.  So, where did the money go?  And, why can't the City handle its current budget obligations with $100 million more in revenue, and fewer obligations, than Peterson had?

Jail Overcrowding And The 2005 COIT Increase

Much hay is trying to be made of an increase in the County Option Income Tax back in 2005.  So I thought I'd revisit just what was going on at that time and who voted what way on the increase.

Jail is the place where folks who have been arrested await trial.  Prison is the place where folks who have been found guilty go to serve their time.  Not all those folks who are in jail are innocent of the crime for which they are charged.  Not all those folks who are in jail are guilty of the crime for which they are charged.

For many years, Indianapolis/Marion County had a jail overcrowding problem.  It really was a human rights issue.  Finally, the Courts handed down an order that limited the number of arrestees who could be kept in the jail.  What followed was the release of arrestees to keep the count below the court order.  The situation is best summarized by Councillor Steve Talley at one of the hearings to raise the County Option Income Tax (I'll tie that tax increase in below - this is just the best summary I could find of the jail overcrowding problem)

Councillor Talley said our criminal justice officials are over stressed and under funded.  Our jails have been over crowded for the past 30 years, and worst of all, murderers and other dangerous criminals are being put back on the street.... Councillor Talley said since the early release of criminals in 2001, more than 9,000 offenders have been put back onto the street and five have been linked to homicides following their releases. He said that in 2004 alone, more than 1,500 people were released from jail early. Of those, 238 have committed additional crimes while awaiting trial. Councillor Talley indicated that 31% of criminals released early fail to appear for scheduled court dates.

I actually believe that the Council's finest hour came when they formed the Marion County Criminal Justice Planning Council to examine all the reasons why the criminal justice system was so slow that arrestees backed up in the jail - waiting for trial.  This group examined all of the ingredients.  Their approach was non-partisan and when they went to the public to share their findings, they did so by having Democrat Judge Mark Stoner and Republican County Clerk Doris Ann Sadler as the spokesmen.  The Planning Council was established in 2003.  The members of that group were representatives of the City-County Council Sheriff's Department, IPD, the Prosecutor's office, the Public Defender, Community Corrections, the Crime Lab, the County Clerk, the Circuit Court, and the Superior Courts, among others.

Enter Prop 44, 2005, to increase the County Option Income Tax from 0.7% to 1.0% over three years.  The tax had been held down in Marion County while all surrounding counties had gradual increases over the years and were already at 1.0%.  In fact, almost all counties in Indiana had reached that level by this time.

Prop 44 was sponsored by Democrat Councillors Nytes, Talley, Sanders, Gray, Moriarty Adams, Brown, Bowes, D. Mahern, and Boyd, and Republican Keller.  It passed out of committee with a do-pass recommendation by a vote of 4-3 that split along party lines.  Voting yes were Democrats Sanders, Brown, Moriarty Adams, and Nytes.  Voting no were Republicans B. Langsford, McWhirter, and Plowman.

Come the night of the full Council meeting, the comments of Republican Councillor Borst are the most illustrative of the evening's discussion.  From the minutes of that meeting:

Councillor Borst said that he started the day believing he would vote one way on this proposal and ended the day thinking another. He said that he sat down and calculated over $115.5 million worth of annual needs for the City and County that cannot be met with the current budget and revenues. He said that he does not think this is the right answer to solving the problem and believes it is just another band-aid which does not come close to fixing the budget woes.  However, he recently saw the judiciary and criminal justice system take steps in consolidating administrations to find cost savings and free up funds, and he applauds them for taking these steps and thereby indicating their serious commitment to funding initiatives. He said that he is tired of seeing prisoners released from jail early and wants to see the crime lab get the funds they so desperately need. Councillor Borst said that he was encouraged to see what happened today, with Republicans and Democrats getting together and working to solve problems and communicating openly. He said that the result of these discussions was an agreement to insure that revenues generated by this increase will be used to address funding needs of the criminal justice system and public safety operations, such as jail overcrowding, criminal court expenditures, forensic services, and debt owed to the Indiana Department of Corrections. He said that, if available, new revenues generated by the proposal could be applied to inventory property tax relief for citizens, and if another revenue source is identified, the revenue could be applied to real property tax relief or the COIT could be rolled back. He added that several recommendations are being identified to present to the Marion County Criminal Justice Planning Council for streamlining and creating efficiencies within public safety and the criminal justice system. He said that he is against raising taxes, but will now support this proposal, knowing that the money will go where it is needed most.

Prop 44 passed by a vote of 21 to 7 with one absence (Speedy).  Voting yes were Democrats Abduallah, Bowes, Boyd, Brown, Conley, Franklin, Gibson, Gray, D. Mahern, Mansfield, Moriarty Adams, Nytes, Oliver, Sanders, and Talley, and Republicans Borst, Bradford, Keller, B. Langsford, McWhirter, and Randolph.  Voting no were Republicans Cain, Cockrum, Day, Pfisterer, Plowman, Salisbury, and Schneider.

The next couple of years saw the rollout of the plan and its implementation, funded by the increased COIT funds.


An Indianapolis Business Journal editorial on August 2, 2006

There has been some progress. The Marion County Criminal Justice Planning Council's vote Aug. 1 to recommend renting 200 jail beds for six months was a smart decision that the City-County Council would be wise to ratify at its meeting Aug. 7. But it's purely a short-term fix.

There is broad agreement that the long-term solution is making the wheels of justice turn faster. Cases need to proceed more quickly so that inmates spend less time in the county lockup.

To grease those wheels, we need more judges, attorneys and clerks. And we need to pay them better, so that they stick around a few years.

And from IBJ Reporter, Scott Olson, on January 1, 2007:

 At the administrative level, Peterson called for an extra $54 million in public safety and criminal justice spending in 2007, $19 million of which funded fire protection. Most of the money came from the County Option Income Tax and borrowing from the city's Sewer Fund.


From that, $2.2 million already has been spent to create a night court to process cases faster and relieve strain on the jail. Overcrowding is a major concern, because a court-ordered cap forces Sheriff Frank Anderson to release potentially dangerous inmates early if the jail population exceeds capacity. A concept he has floated involves outsourcing jail management to a private firm that could manage inmates more efficiently, supporters say.

Moreover, Prosecutor Carl Brizzi has added six deputy prosecutors to the homicide unit, bringing the total to 12. COIT money funded the new positions, as well as additional jail beds.

The Planning Council still has a remnant in the Thursday Afternoon Group.  Representatives of the Council and Public Safety and Criminal Justice agencies all meet to discuss and coordinate ways to be more efficient and effective.  I'll repeat what I said above and many times in public meetings.  I believe that the work of the Marion County Criminal Justice Planning Council was the finest example of good government; with all parties working to determine the causes of a problem and the ways to remedy them.  The positive outcomes of this group's work continue with our City today.

The Evolution Of Code Enforcement In Indianapolis

Normally any blog entry about Code Enforcement would get three readers.  But, given the decision to require that Pan Am Plaza and the garage underneath be repaired, despite their utility to the upcoming Super Bowl, and the wailing and gnashing of teeth about fee increases in the current campaigns, it seems to be just what is in order.

Let me state this right at the beginning.  Code Enforcement saw significant gains under two successive Mayors, to the benefit of all of Indianapolis.  This should not be a bad thing.

For the historical perspective, one has to go back to the first time Bart Peterson ran for Mayor.  It was clear that neighborhood organizations' number one issue was the total failure of code enforcement in the City.  Few violations were getting prosecuted, few inspections of new buildings were actually getting done, and the frustration with that situation was rising with each passing day.  Peterson took the issue seriously and I think his handling of it is one of the true successes of his administration.

Peterson hired a guy with experience in Virginia, Rick Powers.  Powers had seen what an effective code enforcement operation looked like.  He came into the Office of Code Enforcement, at the time under the Department of Metropolitan Development, and he shaped it up.  It took a couple of years to change the culture, but he turned it into an effective and efficient organization.  For the first time, residents of Indianapolis were seeing that the ordinances, when enforced, meant better, more enjoyable neighborhoods.  Inspections of the vast number of new homes were rising.  There were still problems as Peterson left office, but the trajectory of the Office of Code Enforcement was steep and in the right direction.

Enter Greg Ballard's term as Mayor.  Ballard kept Powers on at Code Enforcement.  By this time, the effectiveness and efficiency of the Office of Code Enforcement could best be appreciated by the huge backlog of cases in the zoning section of the Office of Corporate Council.  Chris Cotterill was chosen by Ballard to head up that Office.  He very soon came to understand that one prosecutor, no matter how dedicated, could not cover the volume of violations headed to the Environmental Court for adjudication.  He beefed up the staff working on zoning, much to the positive benefit of neighborhoods across the City.

Discussions moved toward spinning the Office of Code Enforcement out of the Department of Metropolitan Development and into its own Department.  Other changes would be rolled into it as well.

The Department of Code Enforcement (DCE) would take on some other functions, like licencing of certain businesses.  The requirement for licensing of taxis, massage parlors, escort services, and the like, was on the books, but largely ignored and not really pursued by the Office of Financial Management, which for some reason had the responsibility.  Taxis were the number one complaint of the downtown business community; to their minds negatively impacting the impression tourists have of Indianapolis.  

The number of code enforcement officers would be increased to ensure that all buildings were inspected during their construction.  This would not only ensure construction actually met the standards written into law, it would cause the overall insurance rates for homeowners to drop, because there was some assurance that the houses would stand.

And all of this would be funded by turning the new DCE into an entirely fee-based operation. 

Spinning the Office of Code Enforcement into the Department of Code Enforcement garnered nearly universal support.  One caveat was the requirement of the business community that the new fees be rolled in in two phases.  Other than that, there really was no discussion of those fees.

Proposal 177, 2009, was sponsored by Councillors Lincoln Plowman (R), Jackie Nytes (D), Brian Mahern (D) and Dane Mahern (D).  The synopsis of the proposal was:

amends the Code to establish a new city department of code enforcement, to consolidate into two sections the various fees to be collected by the new department, and to make corresponding technical corrections

The Rules Committee, Chaired by Councillor Bob Lutz (R), considered the proposal on May 12 and June 16.  Prop 177 passed out of committee with a unanimous vote of "do-pass recommendation".  Those voting in this committee were Republican Councillors Lutz, Cockrum and Plowman, and Democrats Gray, Mansfield and Sanders.  The only point of discussion that made it into the minutes of that committee meeting was to which Council committee the new department should report.  Nothing about the fees was noted.

The vote at the full Council meeting on Prop 177, 2009, was 28 yeas, 0 nays, and one absence (Moriarty-Adams).

The establishment of DCE concurrently raised 113 fees by my count.

In 2010, Prop 149 was introduced and raised 88 of the fees further.  This proposal was sponsored by Councillors Mike McQuillen (R), Lutz (R), and Mansfield (D).  The synopsis was:

amends the Code to add and amend various chapters related to license and permit fees to be collected by the department of code enforcement pursuant to a cost analysis study determining the cost of the services underlying these fees to the department

A study had been conducted of the amount of time and salaries required to do pretty much every task DCE would be engaged in. Those folks seeking permits would be charged the amount of money it cost the City to investigate and issue a permit - tailored to the type of permit being requested. Likewise, taxi inspections would be done for the first time and the license fee would cover the expense.  Inspections, etc., were also reviewed for exact cost to the City.

The vote in the committee was 6-1.  Those voting for a "do-pass recommendation" included Republican Councillors Lutz, Cockrum, McQuillen, and Vaughn, and Democrats Mansfield and Sanders.  The lone vote against was Republican Angel Rivera.

The full Council passed the fee increases by a vote of 22 to 6, with one absence (Bateman).  Those voting for the proposal were Republicans Cain, Cockrum, Day, Freeman, Hunter, Lutz, McHenry, McQuillen, Malone, Pfisterer, Scales, and Vaughn, and Democrats Evans, Gray, Lewis, Brian Mahern, Dane Mahern, Mansfield, Moriarty Adams, Nytes, Oliver, and Sanders.  Voting against the proposal was Libertarian Coleman, Repbulicans Cardwell, Rivera, and Speedy, and Democrats Brown and Minton-McNeil.

I agree with the fee increases.  It is, though, a matter of personal opinion that should guide the vote of the rest of the Indianapolis community on November 8.

I haven't heard anyone say they would seek to repeal the fee increases and return code enforcement and its other new duties back to funding through tax revenues.  Hopefully the neighborhoods of Indianapolis will see Code Enforcement blossom even further in effectiveness and efficiency under a third consecutive Mayor.  We will all be winners if that happens.

TIF Districts - The Good, The Bad, & The Ugly - Part 3

In this part 3 of the TIF District series, I'd like to share some links that provide further information - some of which is authored by folks you'll be familiar with.

MKNA blog on TIF districts -- (current) as part of an educational process as the Meridian Kessler Neighborhood Association deliberates on the potential for a TIF area landing in their neighborhood

South Bend Tribune "Good tool, but..." -- (2011) brings up pro and con TIF district points

Baker & Daniels "Tax Increment Finance in Indiana" -- (pdf created in 2008, document undated)  authored by Melina Kennedy and posted on CDFA.net, a pro-public-private partnership and pro-tax-financing group (thanks to Yoda, who cited this document in the MKNA blog)

CDFA overview of TIF history and types  -- (2008) authored by Jackie Nytes and posted on CDFA.net, a pro-public-private-partnership and pro-tax-financing group -- has county map showing location of TIF districts at that time

An IBJ article "City reviews TIF districts" -- (2008) wherein Mayor Greg Ballard criticizes former Mayor Bart Peterson's TIF district policy as overreaching and some TIF districts having overlived their usefulness

Neareastside HOTIF FAQs -- (2006) written on City of Indianapolis, Mayor Bart Peterson, letterhead



If you have other links, please provide them to me and I'll edit this entry (hadenoughindy@gmail.com)

TIF Districts - The Good, The Bad, & The Ugly - Part 1

TIF Districts - The Good, The Bad, & The Ugly - Part 2