Can We Just Stop With The Lying?

So the income taxes are going up.

Front and center in the IndyStar review of last night's vote of the Council, is this quote from Councillor Aaron Freeman:

"We have fewer officers than we should because we have been taking in less property taxes in this bad economy the last several years."

He makes it sound like the Council and the Mayor have had less money to work with and that is why they didn't support funding recruit classes for IMPD these past few years, as the Council Democrats had continued to try to do.

Freeman either knows he is lying to the public, or he is just passing along the meme offered by Ryan Vaughn.

Yes the City-County takes in less property tax revenues than they did before the tax caps came into effect.  They also have fewer bills to pay.  This actually left the City-County with about $50 Million MORE to spend than they had before the tax caps.  Add to that the increased revenue from Peterson's Public Safety Tax, and well - they had plenty of money to do any hiring they wanted.

But, they did not.

Even without the tax increase, the 2015 budget does fund a recruit class of 50.  With the tax increase, they are looking at 40 additional.

So, its not true that "we have fewer officers than we should because we have been taking in less property taxes in this bad economy the last several years".  We've had the money, just not the interest.

Suppose for a second that Freeman's statement were true - why would we need to raise income taxes when both property tax revenues and income tax revenues are climbing now that the economy has improved?

And if the Ballard Administration truly sees a need to increase the number of officers, why is Jason Dudich saying that only $4 M will go to IMPD's budget in 2015?  The tax increase is expected to bring in $29 M.  $2 M goes to the excluded cities and towns, by State mandated division of Public Safety Tax revenue.  Likewise, $10 M will go to County functions - but no discussion as to how that money will be spent has been done in public.  That leaves $13 M that Dudich wants to put into IMPD fund balance.  This would be overruled in a heartbeat if Vaughn wanted the money to be spent by IMPD.

That's right folks - you get to pay more in taxes so that the biggest chunk can fatten the year end balance.  And a whopping fourteen cents of every additional dollar will go to hiring more police officers.  Fourteen cents.

One cannot ignore the fact that this tax hike comes just before the proposed Criminal Justice Center gets crammed through.  Could be a coincidence.

So, we'll see if this Administration actually moves toward keeping interested in hiring more officers as the years go by, or if they'd rather spend this new money on something else.

Meanwhile, can we just stop all the lying?

Another Budget - Another Big Whopper

Why can't we get a budget introduced without some accompanying, outrageous, whopper made about our financial situation?

This time around, Chief of Staff (aka Mayor) Ryan Vaughn, is reported by John Tuohy of the IndyStar, as having said

Vaughn said tax collections have lagged since passage of property tax caps in 2008. Next year's property tax revenues will be $63 million less than in 2008 -- the homestead tax credit and the police tax were a couple of the only options the city has left to collect additional money, Vaughn said.

Come on Ryan.  Either you know you are pulling a fast one over the public, or you do not.  Neither option is adequate to transparency in government.

Vaughn specifically picked 2008 for a comparison because that was the last year before the tax caps program was fully implemented.  You don't have to talk to government officials very long before they are bemoaning tax caps.  I don't want to dismiss all of their claims out of hand.  But - and this is a big 'but' - they never seem to recall the massive amount of obligations that the State took over, funded by the 1 percent increase in State sales tax.

In the case of the City-County, the State of Indiana took over funding of specific obligations that used to cost the City-County over $113 M a year.  For instance, the famous pre-1977 police and fire pensions.  This pension had not had prudent payments made to it over the years and those public safety folks were beginning to retire in mass.  This is the financial cliff that Peterson was facing when he got the public safety tax raised.

So, when you subtract the $113 M a year from the 2008 property taxes, well then Mayor Ballard got quite a golden ticket from the State Legislature.  When you subtract that $113 M a year in obligations, AND account for tax cap penalties, the City-County collected just about $50 M more from property taxes in 2014 than in 2008.  Yes, I said MORE.

Tuohy's article also states

The city projects it will collect $574 million in property and income taxes this year, an increase of $34 million over last year.

Okay - there's the real numbers for 2015.  Not this flagrant misrepresentation of our financial resources compared to pre-property-tax-caps days.  Geez.

Here is what I wrote back in April for the Indiana Forefront blog - IBJ's blog.

Below is a graph showing the City-County total property tax levy and the net levy (total levy minus circuit breaker penalty) from 2008 through 2014. To simplify the jargon, the total levy is what they asked for, the net levy is what they got. The state took over City-County obligations in 2009 and the circuit breakers began to hit in 2010.

As you can see, the total property tax levy (what they asked for) and net levy (what they got) took a real jump in 2009 (The 2008 data is normalized for the $113M in City-County obligations taken over by the State in subsequent years so we can compare apples to apples.)  Without a doubt, the initial year of the tax caps was good for the resources of Indianapolis.

I look forward to finding out more about the 2015 budget.  But, please save all of us from the big whoppers.  Let's act like responsible adults.

Hold On To Your Wallets - Its Budget Time

Tonight's City County Council meeting will kick off the budget process for next year's spending and taxing.

Mayor Ballard will give his annual budget introductory remarks. 

Elimination of the local homestead credit is once again included - Prop 248.  Not to make ends meet anymore.  Not to contain the ballooning public safety budget 'deficit' anymore.  This time he wants to eliminate it to fund pre-K education.

I did not see increases in income taxes, but expect to see that appear soon enough.

Being introduced tonight is a second attempt to increase the stormwater user fee that appears on the property tax bill.  Prop 249 would automatically increase the fee each and every year going forward.  This feature was also included in the first attempt and drew speculation that the Ballard administration was just sweetening the pot so that he could sell off this utility to a private concern.

We are being treated again to a lobbyist-drafted ordinance sponsored by Councillor Mary Moriarty Adams.  Prop 250 would allow digital billboards in Marion County.

Prop 254 is offered in reaction to Ballard-Vaughn's recently inked agreement with Covanta for 'recycling', which contained a 70% tax abatement that was not called a tax abatement.  Prop 254 urges the State Legislature to make any agreement containing a rebate on taxes or a forgiveness of taxes to be subject to Council approval, just like any other abatement in a TIF district is.

Coming before the Council for a vote this evening are a few items, including:

Prop 241 urges IPL to abandon coal as a fuel at its Harding Street plant.  Check this one off as completed.

Props 162 and 163 would allow $100,000 from the Mayor's Office budget be donated to United Way.  This brings up two questions - why is there so much fluff in the Mayor's Office budget and why should taxpayers be subsidizing any non-for-profit that brings in millions of dollars a year on its own?

Prop 349, 2013 would establish a TIF in the Avondale Meadows area.  This TIF is much needed, no doubt.  But specificity regarding its funding remain lacking and of concern.  Also of concern is a lack of resident control of or input on the projects that might get funded.

Prop 195 would establish a landlord registry.  It would cost local residential landlords $5 per year, but it would require out of state owners to establish an in-state manager responsible for any infractions that might beset the property.  Failure to register a property would result in fines ranging from $100 to $500.  This is a good one in my book.

Another good one is Prop 232, which would require defibrillators in all public buildings and buildings housing a department or agency of the City County government.

Budget hearings start this week.  Tuesday will see the introduction by Controller Jason Dudich as well as the budget presentation his office, the Office of Corporation Counsel, and two others.  Wednesday will be the budgets of the Public Defender, Community Corrections, and the Child Support division of the Prosecutor's office.  Both hearings will begin at 5:30 pm in Room 260 of the City-County Building.  Thursday will be the hearing for the Parks Department budget.  That will begin at 5:00 pm, same room.

Slow Down the Criminal Justice Center Bullet Train

The Ballard Administration no longer pretends that it is transparent.

The behind closed doors decisions being made regarding the proposed criminal justice center is a prime example.

The administration is even blocking press access to the request for proposals it put out.  This comes AFTER the State's Public Access Counselor's opined against the City's position.

IBJ reporter, Kathleen McLaughlin wrote last Saturday in an article about funding the center

Director of Enterprise Development David Rosenberg declined to state the maximum annual fee, which the city already has shared with three pre-qualified bidders. The mayor’s office also refused to release the request for proposals, a type of document typically considered a public record.

Indiana Public Access Counselor Luke Britt said he couldn’t think of an exemption to open-records law that would apply to the RFP. The city still had not cited an exemption as IBJ went to press.

So, behind closed doors, Mayor Ballard's people are happy to share details with bidders, but not with the public who would pay for the deal.

While I'm on paying for the deal, McLaughlin's article extensively quotes past City Controller, Jeff Spaulding, and his skepticism that costs will really be confined to current budget expenditure levels for the services that would move into a justice center.

Former city controller Jeff Spalding said the administration’s unwillingness to walk through the math behind its conclusions makes him skeptical the new facility won’t end up requiring more public dollars.

“I want the criminal justice center to happen,” said Spalding, who left the Ballard administration in April 2013 to become director of fiscal policy and analysis at the Friedman Foundation. “There’s more potential downside if you don’t do it the right way.”

 Ballard is already spending significant amounts of cash that the City can't afford on the proposal.

It was revealed last week, to the shock of most, that a $750,000 no-bid contract had been awarded to the new employer of former campaign manager and special counsel to the Mayor, John Cochran.  Bose Public Affairs Group is in charge of public relations for the justice center by this contract.  John Tuohy, IndyStar reporter who broke the story, quoted Republican City-County Councillor Jeff Miller as saying

Miller said he was not aware of the $750,000 contract Cochran signed.

"That is a big number. Now I know why he's so easy to get a hold of," Miller said. "I knew he was not doing it for free, but I did not know (his firm) was getting that much."

Fellow blogger, Gary Welsh, has written extensively on the justice center and the money being thrown at it over at Advance Indiana.  About the $750,000 contract with Bose, Welsh writes

Does anyone else see the irony in Ballard throwing away $750,000 of our taxpayer dollars on a politically-connected firm which has just hired his likely Democratic opponent next year, Joe Hogsett, and which will in turn invest that money in doing all within its power to ensure that Hogsett defeats Ballard in next year's election?

As I recall, Ballard did the same thing when Melina Kennedy ran against him - awarded her law firm a fat contract on the deal that sold the water and sewer utilities to Citizens Energy.   That may have been one reason she never really had an opinion against it - in public at least.  So, with this one $750,000 contract, Ballard is sweetening his old pal's value to his new employer and potentially tying Hogsett's hands as far as being too vocal and too against a justice center.  Of course, who knows if Kennedy personally liked the Citizens deal and if Hogsett will really like or dislike the justice center proposal.

The latest stunner was broken by Mary Milz of WTHR.  Welsh summarized the nearly $10 Million of of additional no-bid contracts uncovered by Milz this way:

WTHR's Mary Milz has now uncovered millions more spent by Mayor Ballard on no-bid contracts. Those include:

• $1.5 million to Bingham, Greenebaum Doll for legal services, the former law firm of Ballard's likely Democratic opponent in next year's mayoral election, Joe Hogsett;
• $4.7 million to Hellmuth, Obata & Kassabaum, Inc. ("HOK") for project development services; and
• $3 million to KPMG Corporate Finance for financial services

Keep in mind that this boondoggle of a project still requires the approval of the City-County Council. If for some reason the council decides against the project, that $10 million is just flushed down the drain. Imagine how many new cops could have been hired with the money Ballard has blown on these no-bid contracts.

Exactly.  This is serious money that we need for other things right now.  But Ballard and his people are going to push this through if its the last thing they do.  And it very well might be.

The public is on the hook for the excessive contracts already let on this deal.  They are being kept in the dark about any details, made all the worse by the Ballard Administration's violation of the Open Records laws in order to keep secret from the public, what it is happy to share with bidders.

Today's IBJ has another article by McLaughlin.  This one deals with the potential impact moving all of the Prosecutor, Sheriff, and Court offices out of the heart of downtown.  Office vacancy rates still have not recovered from the Great Recession.  McLaughlin writes

At a time some large downtown law firms are cutting back on space, the proposed criminal justice center will gut the downtown office market.

Moving the Marion County prosecutor and public defender to the new center at the former GM Stamping Plant southwest of downtown will alone shift 130,000 square feet.

Add in the 590,000 square feet occupied by jails, traffic court and arrestee processing center and the downtown core is on track to empty a total of 720,000 square feet—roughly equivalent to the entire OneAmerica tower.

and

City officials claim the moves to the new justice center will add only about 1 percentage point to the existing 20-percent downtown vacancy rate. But Jon Owens, an office broker at Cassidy Turley, isn’t buying it. He said the vacancies could account for three times the amount city officials predict.

With a total of 10.5 million square feet of downtown office space, the removal of the prosecutor and public defender offices alone will move the needle 1 percentage point, Owens said.

“It has the potential to take a big chunk of that southeast quadrant, kind of like what the state government center did in the early 1990s,” he said. “It took forever to backfill that space.”

While the proposed justice center is being sold as a complete consolidation of criminal justice services, it is not.  Back in April, McLaughlin reported

Fullbeck [Ballard's senior policy advisor for economic development] said the request for proposals from developers, due out this month, will not include office space for the Marion County prosecutor and public defender. That space will be built under a separate procurement process, which he said will allow the developer to decide whether to build additional leasable space for other users, such as jail-service providers.

The price tag just keeps getting bigger and bigger.

The public deserves details and time for discussion.  The current trajectory is for the bids to be back just as the budget for 2015 is being finalized.  If they follow former practices, they'll put out information around the holiday season when most of the public's attention is elsewhere.

But complete transparency is feasible at this point in time.  There is no excuse to keep from the public what the Ballard administration is willing to tell bidders.  There is no excuse to put $10 M of taxpayer money at risk through no-bid contracts for a justice center that may not happen.

There is no excuse.  Then again, I don't think Mayor Ballard and his Chief of Staff, Ryan Vaughn, care one wit, what you or I or the Council or the press thinks.  They see our money as their money.  They see our City as their City.  They have their goals and they don't care how much of our money it takes to reach them, nor how badly it could go for future taxpayers of Indianapolis.

Yes Kids, TIF Bases Really Did Erode

I was pretty taken aback when alerted recently to a Twitter exchange between City-County Councillor Zach Adamson and Mayor Ballard's Chief of Staff, Ryan Vaughn.

Yes, Ryan Vaughn actually stated that "TIFs don't touch the base.  That's why it's called Tax 'Increment' Financing."

It is discouraging that someone so involved with spending our tax dollars, does not understand the difference between the promises made about TIFs and the reality.

The erosion of the base was so prevalent in Indiana, that two years ago the Legislature enacted changes in how the base is recalculated each year (the TIF neutralization). 

I have obtained all of these forms for all Marion County TIFs from 2008 to 2013.  Below I chart the increment and base for all TIFs whose base was not already zero in 2008.  I did not include 2013 data because they grouped the TIF numbers - for instance, all the component TIFs of the Consolidated Downtown TIF are no longer reported individually.  Suffice it to say, the new base recalculating method is most helpful in preserving the base.

Some notes to the graphs:
Assessments are done in one year, and the taxes are billed the following year on that assessment.  Thus, the x-axis reports time in the format of 2008pay2009.
The y-axis for the increment is on the left and increment is shown in red.
The y-axis for the base is on the right and base is shown in blue.

29 TIFs had non-zero base in 2008.

 

 

 

I think TIF 151 had a transcription error on the pay 2011 form

 

TIF 640 had been dormant before 2012, when it was reactivated.  The base was reconfigured at that point in time.

 

 

 

 

Regardless of what happened to the increment - rise or fall - the base always fell.  The combined erosion of the bases between 2008 and 2012 (not counting TIF 640 - the Dow Elanco TIF because its base was reconfigured during that period) amounted to $283,579,872.  The taxes on that eroded base did not continue to flow to the schools, libraries, or the city, as was promised.  Instead it went into the increment to fatten the TIF slush funds.



Follow the Money

A long time ago now, the Marion County Alliance of Neighborhood Associations began following the City's annual budget based on one proposition.  That proposition is that our elected officials can say lots of things, spin lots of yarns, and try to influence public impressions, but they will always put money into the things they feel are priorities regardless of what they say.

Today we sit with news reports of yet more MILLIONS of dollars going to the Pacers and their billionaire owners - voted on by the CIB prior to public disclosure of the actual deal agreement(read Gary Welch's excellent piece on Advance Indiana for more). 

Our elected officials are prepping us for goodly increases in income taxes to provide more cops on the street - while saying violent crime is actually down, its just shooter's aim that has improved.

Our elected officials will be looking to eliminate the local homestead credit - the third time for this push.

Our elected officials will look for a calm moment within which they can place the mass transit referendum on the ballot to raise taxes even more - and you just know that the light rail boondoggle will somehow be included once again.

But, where do we actually stand?  What priorities has Mayor Ballard-Vaughn actually placed on his spending of tax dollars?

Below are two charts comparing the actual budget numbers for some City Departments and Municipal Corporations for 2014.

First is a comparison of several Municipal Corporations as well as the collective revenue from Marion County's TIF districts.  The total budget for all Muni Corps is nearly that of the entire City-County budget ($955 M vs $1.0 B).

You will notice that our elected officials value sports as much as they value the current IndyGo and public Library combined.  The slush fund that TIFs provide, of course, also rivals the basic public service spending that I thought City government was supposed to provide.

The chart below compares spending on different departments included in the City's annual budget.  The Fire numbers include the fire budgets for the three Townships that still operate their own departments in addition to IFD's budget.  The Parks budget number shown below also includes money Ballard has moved into DPW's budget.  DPW's budget number has the Parks money removed.

Elected officials give a little more priority to police and fire than they do sports, but not substantially more.  Parks has been gutted by this Mayor.  In fact, Ballard-Vaughn's proposed RebuildIndy 2 program would spend just about as much on painting bike lanes as he budgeted for all parks in 2014.

When an elected official talks to you about his or her priorities, ask them how they are really spending our money.

Update on SB 188 and Its Applicability to Marion County

Last week I noted some of the exciting changes the Legislature enacted through SB 118.  Well, an alert reader gave me a heads up that the bill did not apply to Marion County insofar as giving the City-County Council the authority to review the annual budget of the Metropolitan Development Commission.   I dug down into the Indian Code and verified that the alert reader was in fact correct and my previous depiction was incorrect.

I will go back and edit the old entry.  Not wanting to leave a false impression with those of you who read that entry already, I am going to recap the highlights and note whether the item applies to all of Indiana's redevelopment commissions, or to all but the MDC and Marion County.

1) Establishment of a sunset date for all old TIFs that do not now have an expiration date:  As noted, the consolidated downtown TIF is the only set of old TIFs in Indiana that will not have to have a sunset date created.  The date sunset date for the rest will be the later of June 30, 2025, or the last scheduled payment of outstanding bonds secured with that TIFs revenue.

2) Marion County will be the only County where the legislative body will not review the budget of that County's redevelopment commission (assuming any particular County has one).

3) In all Counties except Marion, the legislative body will review all property purchases either over 3 years in term or $5 M in cost.  Our City-County Council gets to review the property purchases of the MDC if the repayment of the debt for the purchase takes more than 5 years.

4) The MDC already must have the approval of the City-County Council in order to issue bonds.  While the Code does not specify that the Council can make changes to the term, interest rate, provision for early payment or collateralized interest, the Council certainly can withhold its approval for any of those reasons.  The other Counties get this legislative approval requirement placed on the issuance of bonds by their redevelopment commissions.

5) All County's legislative bodies get to approve, and adjust if it suits them, the annual determination of how much TIF increment will pass through to the other taxing units, once the expected revenue exceeds twice what is required to make the schedule debt payments and cover expected pay as you go projects for the coming year.

6) All Counties' redevelopment commissions, including the MDC, will have to show that any new tax revenues generated by the creation of a new TIF or expansion of an old TIF, would not have been generated except for the creation or expansion of the TIF.  It cannot be a simple claim; there must be supporting evidence.

So, the busy lobbyists for Mayor Ballard/Vaughn kept some of the changes from impacting their coveted slush funds.  Luckily for us, there still are important changes coming to Marion County, as well as the rest of Indiana's Counties.

Onus of TIFs Not Equally Shared

Anyone who has followed this blog for very long knows that TIF districts cause all of our tax rates to rise, account for at least half of the circuit breaker penalties that plague the delivery of basic services (from cops to schools), and are really slush funds so the Mayor can reward his favorite developers, bond salesmen, and lawyers.

Most of us know that the burden of having TIF'd real estate is not distributed evenly.  I was given a heads up last week, that there is information available on the State's Gateway website related to assessed values.  When I saw that information, I found it also had important data about the distribution of taxable property between the various taxing districts in Marion County.

From this information I was able to calculate the amount of real estate assessed value, personal property AV, and more, as a percent of the total for each Township.

Before I pull you too far into the weeds, let's back up a tiny bit and define some terms.

Property taxes are based on the value of the real estate and the value of personal property owned by businesses - from conveyor belts to manufacturing equipment.  Business personal property is in the crosshairs of Governor Pence and the Indiana Manufacturer's Association for eventual elimination.

The data available on the State's Gateway website go into a fair amount of detail.  It also notes how much of the assessed value of a TIF is being 'passed through' in a given year.  This decision is made each year by Mayor Ballard/Vaughn, through the actual vote of the Metropolitan Development Commission, which he controls.  Each TIF district is examined for how much tax money the Mayor wants to keep, and he 'generously' sends some back to the other taxing units.  But, next year he could simply decide to keep all that value in his slush funds.  It is optional.

I looked at the percentage of assessed value of real estate in each Township caught in a TIF - both before and after the pass through.  (for those who don't mind the weeds - these numbers are the net AVs after deductions, like the homestead deduction, are subtracted)  The number before the pass through is the truer value of the amount of real estate actually ensnared by the TIF.  The number after the pass through is the truer value of the tax base for the TIF in a given year.  I also pulled out the percentage of assessed value of the personal property in each Township caught in a TIF district.  Because Beech Grove, the City of Lawrence, and Speedway have all created their own TIFs, I also aggregated the number for each of these entities.  But, please be aware, that the Township data contains these three city/town data.

Township or City/Town	% Net Real Estate AV in TIF after pass through	% Net Real Estate AV in TIF before pass through	% Net Business Personal Property AV in TIF
Center	39.49%	44.58%	26.72%
Decatur	24.86%	24.86%	0.00%
Franklin	0.03%	0.03%	1.03%
Lawrence Tnshp	4.23%	7.71%	0.83%
Perry	0.70%	0.70%	0.00%
Pike	2.35%	8.91%	2.97%
Warren	0.65%	1.40%	4.16%
Washington	0.01%	4.86%	0.00%
Wayne	9.78%	10.02%	8.41%
Total Marion County	9.77%	13.10%	10.65%
Beech Grove	6.72%	6.72%	2.31%
Lawrence - City	14.06%	14.06%	3.49%
Speedway	4.09%	5.81%	37.52%

Center Township has a frightening amount of real estate trapped in TIFs, at 45%.  To add to the tax burden, they also have the lion's share of personal property in TIFs, at 27%.

My community, Decatur Township, is hit the next hardest for real estate value in a TIF, at 25%.  Luckily, for a while anyway, all the taxes from personal property are outside the TIF.

Wayne Township is hit next hardest with a combination of 10% real estate and 8% personal property value in a TIF.

Washington, Lawrence, and Warren Townships are each home to a 'dormant' TIF district, whose entire AV is passed through each year.  As noted above, that can change with the whim of the Mayor.  The City of Lawrence's TIF districts account for all of the active TIFs inside Lawrence Township.

Pike Township has one TIF district - the Dow Elanco TIF.  This was a dormant TIF just a couple of years ago, but was reactivated recently.  The majority of the value is passed through at the discretion of the Mayor.

The Town of Speedway has evidently gone a slightly different route, capturing far more value from business personal property than real estate inside its TIFs.

 Taking the County as a whole, we are up to 13% of our real estate tax base inside a TIF.  This year some of it was passed through to help pay for basic services, reducing the actual TIF tax base to 10%.  But, as I keep saying, next year the Mayor could decide to keep it all for his special friends.

These numbers probably illuminate the reason Decaturites hate TIFs.  It is a puzzlement, though, why Center Township residents haven't stormed City Hall with torches and pitchforks.

IMPD Budget Recap - It's Probably Not What You Expected

Last night's budget hearing for IMPD was quite well attended.  For those who missed it, let me recap.

Public Safety Director Troy Riggs, Police Chief Richard Hite, and Public Safety Deputy Director Valerie Washington present limited IMPD budget numbers; noting only that the money flowing to IMPD from one fund (the IMPD General Fund) would remain the same, at $187m.  

In 2014, the want to hire 35 civilians to take over duties now conducted by sworn Officers, allowing those Officers to return to patrol duties.  They also want to set up a recruit class of 50 new hires.  That, combined with 10 civilian hires this year, make the 90 new sworn Officers that is being bandied about in the media today.

But, in order to accomplish all of this, they need to have their budget cut by $5.65 m.

Now, I know you want to go back and re-read that last sentence.  Go ahead.  I'll wait.

Yes the IMPD budget is being reduced by $5.65 million.  This includes a $7.09 million decrease in salaries from the current year budget.  No wonder they glossed over all the numbers except that one fund's expenditure total.

So you say, but Pat, what about the $1.4 million in fees to be charged the Officers for use of their take-home cars?  Well, I assume that's in the budget somewhere, but there is  no line that says 'fuel surcharge fee' in the numbers available to the public.  And, all I can say is, what one hand giveth, the other taketh away.

And you say, but Pat, what about the two tax hikes the Council gave the CIB - the increased ticket tax and car rental taxes?  Wasn't the first year's $6m supposed to go to IMPD and IFD?  And, after that isn't 25% of those increases to continue to flow to IMPD and IFD?  Why, yes, that's true.  But the year began on March 1, so the is only two months of 100% CIB 'public safety' revenue in 2014 and the rest is at 25% - so maybe $1m to IMPD. 

But, Pat, you say, what about the proposed increase in the old IPD Tax District?  Isn't that assumed in the 2014 that is on the table?  Why, yes - yes it is.  I know they say it will net about $3 million in additional funds, but the additional revenue IMPD collects is only $1.6 m.  And it actually should show up as a decrease in the property tax circuit breaker.  But that number is just about the same as it was for the 2013 budget.  So, you got me.  I'm sure its in there.  Yet again, what one hand giveth, the other taketh away.

What about the $9 million that is supposed to come from elimination of the Local Homestead Credit?  Surely that's in the IMPD budget.  Ryan Vaughn and Troy Riggs are all over the media saying that if that credit isn't eliminated then the IMPD budget will lose $9 million and there could be no new hires next year if that happens.  Well, this one gets a 'not really'.  Should the Local Homestead Credit be eliminated, the IMPD budget would actually go down about $300,000.  IMPD is better off if its not eliminated.  The elimination frees up County Option Income Tax revenue, but IMPD doesn't see a penny of that money.

Lets add up all the new money that the Mayor Ballard, Vaughn and Riggs imply is in the IMPD budget, shall we?  $1.4 million in fuel surcharge fee, $1 million from the CIB, $1.6 million or $3 million from expanding the old IPD Taxing District, and the $9 million from eliminating the Local Homestead Credit - sounds like $13 million to $14.4 million more money to IMPD, doesn't it?

But - nope.  No $14 million more for IMPD.  The 2014 budget really is $5.65 million less than 2013.

Its all a game to use public safety to secure public support for this round of tax changes. 

Principles Matter - But, Evidently, That's Negotiable

Some power brokers in the Republican Party and some power brokers in the Democratic Party only care about how much money flows their way.  To them, there is no 'enough'. 

There is no 'enough' just because your parks aren't kept up.  There is no 'enough' just because there are too few police and the City can't afford to give them contractual raises.  There is no 'enough' just because all the sellable public assets have been sold. There is no 'enough' just because good public servants are being laid off so that well-connected organizations can get more lucrative contracts to do their jobs - and poorly at that.

There is no 'enough' as long as the City can cash in future generations' welfare for more dollars today.   There is no 'enough' as long as there are more square miles that can be turned into TIF slush funds.  There is no 'enough' as long as the City can gain, even if that gain causes an equal loss to Township Schools.  There is certainly no 'enough' as long as taxes can be raised.

Jon Murray, IndyStar city hall beat reporter, wrote an article that was posted last night online and delivered to subscribers on paper today, that clearly shows how little residents and taxpayers mean to some of those elected to serve the public - not elected to serve themselves and their money backers.  Paul Ogden, over at OgdenOnPolitics, commented on the story last night.

Murray reports on negotiations between Council President Maggie Lewis and Mayor Ryan Vaughn.  These negotiations are about eliminating the local homestead credit and expanding the old IPD taxing district.  He says of those two 'tax changes':

The combined upshot would include a tax cut for central parts of the city, higher taxes for outlying areas and a hit to township school districts’budgets. 

Council President Maggie Lewis, a Democrat, said the Republican administration was holding firm on the tax proposals but has been open to discussing options that include tapping into utility sale proceeds and unused money from tax-increment financing districts.

That could soften the blow of the tax changes by paying for council Democrats’ priorities, she said.

Its not about softening the blow to taxpayers.  The power brokers behind Lewis want those taxes raised - the more the merrier.  Schools be damned, taxpayers be damned - keep the tide of cash flowing ever greater.  Lewis is actually trying to find MORE money to spend to 'justify' voting for raising taxes.  If she cared about the public interest, she'd be negotiating to supplant some or all of the tax hikes with money in the $80 million 'fiscal stabilization fund' that was created with the utility sales money.  But, no, its all about ever more money for the power brokers and the well connected developers and the campaign contributors.

Lewis and Vaughn are just trying to soften the blowback on Councillors who vote for these tax increases.  They are trying to come up with a one-year token infusion of extra money into the budget to somehow bedazzle the public with a forever-year increase in taxes and hit to Township Schools' budgets.

Lewis' branch of the County Democrat Party is as corrupt as Vaughn's branch of the County Republican Party.  And all they want is more access to your purse so their 'friends' can broker more bond sales, lobby for more deals for their clients, land more contracts, and turn their campaign contributions into more tenfold taxpayer handouts.

There still are Councillors who act on principle and for the public good - a couple, all of the time - some, only 'negotiating' that principle away from time to time.   It is up to these Councillors how the City will move forward.

Council Meets Tonight

The Indianapolis-Marion County City-County Council meets tonight.  The agenda lists a couple of items that caught my eye.

Among those Proposals to be introduced, three stand out.  Prop 162 would appropriate $150,000 to the Election board for legal expenses.  The proposal does not say what prompts the need, just that the necessity has arisen since the budget was finalized last fall.  It will be interesting to see what issue compelled the increased legal fees.

Prop 163 and 164 are tandem proposals aimed at sweeping up the last debris left over from Mayor Vaughn's successful budget blackmail action of last fall; when he vetoed several line items in the Council-adopted 2013 budget.  The former proposal reduces the approved budget by the amount vetoed (which targeted County Offices), while the latter proposal restores the targeted County Office budgets to pre-blackmail status.

Up for a vote is one I had not followed and seems innocuous enough.  Prop 108 would add one more appointment to the domestic violence fatality review team; this person being from a domestic violence response organization.  There currently are 15 members, all of which appear to be appointed by the Council.  According to the agenda, this proposal passed out of committee by a vote of 7-0 and was passed by the full Council 29-0.  And yet, it was vetoed by the Mayor.  Go figure.  This will be interesting, particularly to the point of who votes to override the veto, and who does not.

Prop 105 would establish an Economic Improvement District for the Fountain Square commercial area.  This would allow the collection of an extra tax based on street frontage.  The extra tax was approved by a majority of those affected.  After 5 years, another vote of those folks would decide if the EID would be approved for another 5 year stint.  At the 10 year mark, a new petition would have to be circulated to see if there was continued interest in the area.

Prop 133 is yet another abatement, or two actually, for Eli Lilly.  This proposal would approve a 10 year real property abatement and a 10 year personal property abatement for new construction and equipment at their 1555 Kentucky Avenue and 1223 W. Morris Street facilities.  There was much controversy over whether Lilly met its obligations for job creation and investment a couple of years ago in a previous property tax abatement deal.  This time they are not adding any new jobs and will either transfer 175 current employees or use contract workers.  They are also using vigorous hedging language to estimate the actual investment dollars and expected completion dates.  With all the hedging, one surely must wonder if anything in these new abatement deals are anywhere near legally binding.

Now, Prop 141 is the best proposal of the evening.  This one was initiated by Councillor Vernon Brown, cosponsored by Councillor Christine Scales, and significantly added to by Councillor Zach Adamson.  Brown reintroduced the creation of a fund which could be used for public safety recruit classes.  This was passed by the Council last year and was vetoed by Mayor Vaughn as part of the blackmail vetoes.  Brown makes a valid point in reintroducing this measure - that if public safety is truly the Mayor's top priority, then recruit classes or training of experienced, but newly hired, officers and firefighters is a must.  Adamson added that $6 million from RebuildIndy money should be appropriated to the fund - the same amount that is being dedicated to the dubious cricket park on the eastside.  That addition is poetic.

SB 621 - Additional Changes, and, Interesting Questions Arise About the MDC

SB 621, which tries to extend the life of Republican rule over Marion County, has passed out of the Conference Committee changed from the form it had when entering that body.  The body itself was changed, substituting Republican Senator Waltz for Democrat Senator Breaux, and Republican Representative Speedy for Democrat Representative Bartlett.  Having shed any semblance of bipartisanship, the all Republican group passed their version of a 'compromise' piece of legislation.

All sections of the bill now clearly apply only to Marion County.  As we all expected, the 4 At-Large Council seats are again to be eliminated.  The Controller can now 'only' change the budgets of all Departments and Offices if the revenues drop from the levels expected when the budget was passed and 'only' twice a year.  The County Commissioners still lose their two appointees to the Metropolitan Development Commission, but one is shifted to the Mayor and one to the Council, giving the Mayor 5 and the Council 4 appointments.  Lake and Allen Counties are struck from the burden of having to count all absentee ballots at a central location - now only Marion County must do so.  And, Marion County's Township Boards drop from 7 members to 5 at the next election.

Interestingly enough is the question of when the MDC appointments shift.  According to state law, the term of these appointments may be from 1 to 3 years, as determined by the appointing body.  Here is the law, with the MDC portion highlighted:

IC 36-7-4-218
Membership of commission; terms and removal of citizen members
Sec. 218. (a) When an initial term of office of a citizen member expires, each new appointment of a citizen member is:
(1) for a term of four (4) years (in the case of a municipal, county, or area plan commission);
(2) for a term of three (3) years (in the case of a metropolitan plan commission); or
(3) for a term of one (1), two (2), or three (3) years, as designated by the appointing authority (in the case of the metropolitan development commission). 

A member serves until his successor is appointed and qualified. A member is eligible for reappointment.

So, one outstanding question is, when the Marion County Commissioners appointed Cornelius Brown and Ed Mahern, for what term did they appoint them?

The new section regarding the appointing bodies takes effect on July 1, 2013.  But at what time would the Mayor and the Council get to begin taking over those two appointments?

The shift of MDC appointments has always been the worst of the Republican power grab, and will leave Indianapolis and it Citizens even more at the mercy of Mayor Vaughn and his rapacious appetite for giving away taxpayer money to favored developers, regardless of how many employee contracts he has to gut or how many cops and firefighters he has to lay off to afford doing so.

Sometimes the Public Process is Just As Important As the Public Policy

The more important a public policy is, the more important it is to have a robust public process to gauge the wisdom and details of that policy.

So it is with SB 621, which would do many things, including taking Council authority over the City budget and giving much of that real authority to the Mayor through his Controller, taking Commission appointments to the MDC and giving them to the Mayor, and eliminating the 4 At-Large positions on the Council - among other things.  This bill, authored by State Senator Mike Young at the behest of Mayors Ballard and Vaughn, passed out of the Senate and is in the House for consideration.

There are legions of folks lining up to oppose SB 621, but whether or not the Legislators will listen to any of them is yet to be seen.

One thread in the comments of the most recent opponents is the public process, or lack thereof.

Commenting only on the elimination of the At-Large positions, former Senator and Mayor, Richard Lugar, told WFYI that the public process used to create Uni-Gov provided protections to all voters.   "This was a good way when we brought together the entire community to make sure that the entire community had a vote."  (thanks to Jon Easter at Indy Democrat for the quote and link).

Ruth Hayes, on behalf of the Nora Northside Community Council, recently sent a letter to House Speaker Brian Bosma:

Dear Sir:

I write as president of the Nora-Northside Community Council, Inc., (NCC) a 46 year old community "umbrella" organization in North Central Washington Township, Marion County.  With a roughly 12 sq. mile area of interest, we have long been active in working with Marion County government on issues of concern to the 25 to 28 thousand citizens of the area. We are nonpartisan in all matters.

This note is to respectfully call your attention to what I consider a reasonable and thoughtful letter in the March 23 Star by Prosecutor Curry regarding SB 621.  I believe that the most important sentence in the letter states:  "I am opposed to a bill  that seeks to permanently alter the structure of local government without a shred of public outreach and input."  The community has been given no opportunity to discuss, approve or not, revise, etc.  this major reorganization of Unigov.  Dr. Beurt SerVaas, Charlie Whistler, and Richard Lugar gave great thought to the legislation which created the current form of Marion County governance, seeking to assure important checks and balances and provide representation for all citizens and areas of the county .  There were public hearings and media coverage to explain the initiative.  No less should be done now.

Trusting in your sense of fairness and commitment to open and transparent government, we respectfully urge you to not call a hearing on what many community leaders consider to be an ill-conceived and blatantly partisan proposal.  If it's a good idea, then it can surely stand the test of summer study.  We will welcome the opportunity to review and discuss the pros and cons of this initiative.

Thank you for your consideration of this request.

"There were public hearings and media coverage to explain the initiative.  No less should be done now....  If it's a good idea, then it can surely stand the test of summer study."

Councillor Christine Scales, a Republican member of the City-County Council, penned a letter to Senator Young which stood up for the power and authority of the Council itself.  It said in part  (Paul Ogden at Ogden on Politics reprinted the entire letter) :

If SB 621 passes in its current form, the fundamental commitment to a system of governmental checks and balances will be severely eroded.  The Council’s oversight and advisement of budgets and departmental appointments and other policy decisions is already compromised by politics. There always exists a tension between what’s good for a political party and what comprises good governance. Votes for desired initiatives can be bartered for with promises of political perks or threats of punishment.  This sort of vote kowtowing already offers undue leverage and control to an executive branch of government- a tighter grip on power does not favor the public that is served. Extra care must be taken to ensure that processes providing accountability and transparency in government are not trampled on.

If there is a determined desire to reset the equation of county governance, then let there be a commitment to more time and input as to what a new city-county government model would look like and what weight voices of elected officials would carry. It is imperative that crafting of new policies doesn't conflict with traditional tenets of a democratic republic, which I fear SB621 does.
 

All of these comments honor and value the public process, especially in crafting or dissembling these proposed changes in policy and governance.  The public deserves to be heard; not just through letters, but out in the open where the pros and cons can be discussed by those who will be affected.  The public is not well served by this power grab by the Mayor ensconced in SB 621.  It is even less well served by the lack of an open and honest public process airing the wishes of the citizens of Indianapolis.

The Transit Bill is Getting More Interesting

The transit bill got a lot more interesting this morning as I read Chris Sikich's article in the Star ("New roadblocks may loom for Indianapolis mass transit expansion").

No, it wasn't Governor Pence's tepid

“I’m someone who believes this economy is still struggling and we ought to be reducing the tax burden on Hoosiers,” Pence said, adding he would keep an open mind.

No, it wasn't the Koch brothers backed 'Americans for Prosperity Indiana', which is anti-tax, anti-tax, and more anti-tax, and which has money to pour into any referendum fight on mass transit.

What made the mass transit bill a lot more interesting, was State Senator Jean Breaux's use of the mass transit bill to push back on SB 621, which sucks much of the power out of the City-County Council and hands it gift-wrapped to Mayor Ryan Vaughn (see this blog's "Welcome to the Republican World").  Briefly, SB 621 would eliminate the 4 At-Large Council seats, give unprecedented and ill-advised budget manipulation to the Mayor, and hand a super majority of Metropolitan Development Commission appointments to the Mayor, among other things.

I have to admit right up front, I am one of Senator Breaux's biggest admirers.  She is one of a handful of Democrats who keep my hope alive that the Democratic Party is still rooted in principle and pragmatism - not greed, ambition, and power mongering.

And while I'm admitting things, let me also say that the mass transit bill would have to remove the rail option (dubbed the 'Stadium to Paladium' route by fellow blogger Fred McCarthy over at Indy Tax Dollars) [edited to add: Fred tells me I got the route wrong.  The Stadium to Paladium is the red line, rapid bus route] and not create the regional authority to get my support.  I don't mind my taxes going up to pay for a beefed up IndyGo, even if my neck of the woods won't gain anything from it.  But, I can't see pushing for a super sized mass transit in a low density region.

Breaux is willing to use the mass transit bill, which one of the very few pieces of legislation that actually needs Democratic support in order to pass, to leverage against the power grabbing SB 621.  As Sikich reports :

Sen. Jean Breaux, D-Indianapolis, said she would “love to have mass transit and I think it’s very important,” but would vote against the transit bill if Senate Bill 621 advances. And she would try to persuade her fellow 12 Democrats to follow suit.

She says Mayor Ballard wants both bills to pass, and he likely will need Democrat support to get the transit bill through a Republican-dominated Senate that is growing increasingly skeptical about transit.

“He has to decide which is most important, which is he the most concerned about,” she said. “And I would hope he would be most concerned about mass transit ... and that he would consider it to be more important than controlling government.”

Democrats like Breaux want mass transit improvements to make life better for a whole lot of people.  Mayor Vaughn wants it for its slush fund value, and if it happens to make life better, fine.  A few people will be beneficiaries of that slush fund.  And the Mayor of Indianapolis will control the new transit authority and to whom it gives its contracts.

The trouble with the Mayor's office is that it thinks it can get both the transit and power bills made into law.  It rather easily managed to roll enough of the Council Democrats over the recent budget battle; some because they agree with Vaughn and some because they have no backbone.

Mayoral spokesman Marc Lotter told Sikich :

Marc Lotter, Ballard’s spokesman, said Ballard is still hopeful transit will pass. Lotter said transit and the Marion County government bill are separate issues. The mayor, he reiterated, wants all of the provisions in Senate Bill 621 except the elimination of at-large seats. However, he does not plan to ask the legislature to stop the attempt to eliminate those seats.

I think they have a very differ battle on their hands when Breaux is standing on the other side, and they underestimate her at their peril.

Someone needs to stand up to the Republican majority, especially in the abuse of power exemplified by SB 621.  I'm glad it is Senator Jean Breaux.  I'm not surprised it is her, but I am glad.

Welcome to the Republican World

We are witnessing what happens when Republican elected officials get full reign in our Statehouse.

Don't like a Democrat running the White House ?  Call for a Constitutional Convention.

Don't like that a Democrat was elected to the State Department of Education?  Change that Department's authority.

Don't care for a Democrat majority on the Indianapolis-Marion County City-County Council and in County offices?  Change the rules to favor Republicans, in particular the sitting Mayor.

While all are important with detrimental ramifications, it is the last item that I want to address today.

Two bills were introduced, fashioned after a wish list made by Mayor Ryan Vaughn.  The totality of the bills is to increase the likelihood of a return to a Republican majority Council in the near future, and in increase in the ease with with our City coffers can be looted for those with 'special' connections with the Mayor's office.  Let's face reality - this is likely the last Republican Mayor to serve the City of Indianapolis.  They thought he would be a one-termer, and sold as many of the taxpayer's assets as they could get their hands on during his first term.  Now, they are setting about constructing new slush funds from which to reward their supporters.  Sadly, they are getting a lot of assistance from Democrats on the Council, a point to which I will return later.

The two bills are SB 621, by Senator Mike Young, whose district sits on the southwest corner of Marion County, and HB 1399, by Representative Cindy Kirchhofer, whose district runs from Beech Grove to the eastern border of Marion County.  SB 621 was approved by the Senate and has moved to the House.  HB 1399 has not had any activity.

All that is in HB 1399 was included in SB 621, which had one item amended out of it.  SB 621, however, contains a few items extra.  Both originally would grant the Mayor the authority to change, not just veto, any line item amount of the budget approved by the Council.  This was amended out of SB 621.  Both codify that IMPD would be under the direction and control of the director of public safety, which is what actually happens right now.  Both would remove the requirement that the Mayor's appointments for Director and Deputy Director positions in his/her administration be approved by the Council.  Both remove the authority of the Council to get a Payment in Lieu of Taxes (PILOT) payment from the CIB.  Both take two appointments to the Metropolitan Development Commission (MDC) from the County Commissioners and give them to the Mayor - making that body composed of 6 appointees of the Mayor and 3 of the Council.  And finally, both require all agency and department budgets be 'allotted' quarterly by the City Controller - essentially giving that person the authority to lower the budgets passed by the Council at his/her whim.

SB 621 also includes the elimination of the 4 At-Large seats on the City-County Council.  If they were eliminated today, the Council majority would shift to Republican control.  If SB 621 passes, there would not be another election for At-Large seats and 2015 would be the last year they serve.

SB 621 goes further, mysteriously dropping the residency requirement to serve as Mayor to 1 year (down from 5 years) and as Councillor to 1 year (down from 2 years).  It reduces the number of seats on the Township Boards from 7 to 5.  It tosses in a weird requirement that the method of choosing Judges to review any appeal of the Council district maps, be made a public record.  And last but not least, it throws in another opaque requirement that absentee ballots be counted in a central location instead of at the precincts, unless the Election Board unanimously agrees otherwise.

That's a lot of stuff.  Vaughn insists he didn't ask that the At-Large seats be eliminated, but that is as much effort as he put in to getting that section removed from the bill.

In my humble opinion, the most onerous aspect of SB 621, as it now stands, is the authority it would grant to the City Controller to amend the budgets after the Council appropriates the funds.  Currently, the Controller must sign off on any contract, stating that there are sufficient funds to pay the obligation.  Should tax receipts be lower than expected - a condition highly unlikely given the way the State Department of Local Government Finance (DLGF) already holds some funds back to ensure all funds promised are actually delivered - the Controller can simply decline to sign off on new contracts.  This line by line, quarter by quarter, ability to modify any department or agency's budget simply moves the actions out of the light of day.  We saw this year how vindictive Vaughn can be, when he slashed the Democrat controlled agency budgets, leaving the Republican controlled department budgets alone. To have that accomplished behind closed doors is to place a huge burden on democracy.  We elected Democrats to County offices.  They have a legal budget.  Now to let the Republicans unfettered access to vindictively slash their budgets, or threaten to do so for its extortion potential, out of the light of day, is an example of how far Republicans will go to subvert the will of the electorate in order to benefit the Republican party.

The At-Large seats are similarly being eliminated by SB 621, for the sake of the Republican party.  When UniGov was instituted, the At-Large seats were created to ensure Republican control of the Council.  Now that they work to the advantage of the Democrat party, the Republicans want to change the rules.   I would have had more sympathy on the At-Large issue, had the Democrats not pulled their own version of turning the will of the electorate on its ear with their drastic change in the composition of Council Committee membership - dropping the number of minority party members from one less than the majority party, to only 3.  These lopsided committees have caused less representation for those districts that elected Republicans.

All tit-for-tat aside, there should be a compelling reason to change the representation on the Council.  No real argument has been made to eliminate those 4 At-Large seats.  Until a compelling reason is brought forth, one would hope the seats would remain.  But, again, this is not about good government, its about the Republican party changing the rules to maximize its authority when the elections did not go their way.

The third aspect that should cause concern is the change in appointments to the MDC.  This would give the Mayor control of the Airport, the CIB, and the MDC.  The MDC is the body that creates TIF districts and controls how the revenue is spent - and who gets those contracts.  The County Commissioners are among the few who 'get it' when it comes to the negative consequences of unfettered TIFs and who see a reason to get analytical when it comes to reviewing them.  On their behalf, their appointee Ed Mahern, has asked tough questions and made tough statements.  This impertinence has angered Vaughn considerably.  It is not enough for Vaughn that he gets his way regardless, as many of the Democrats on the Council push for one TIF after another, even though the districts pull money from basic services.  This aspect of the bill is likely as much targeted for Mahern's removal as it is to Mayoral control of the MDC.  This is not in the best interest of the taxpayers.  But, it is being pursued not for the taxpayers, rather for the Republican party.

Removing the CIB from the list of municipal corporations that can have a PILOT levied against them is simply pulling the authority from the Council after it had the audacity to think for itself and not do what Vaughn told them to do.

Much of the rest of this bill is simply weird.  Why change the residency requirements or make a bit more paperwork targeting judicial review of challenges to Council district maps?  Five instead of seven Township Board seats is almost irrelevant.  As is the approval of Department heads by the Council.  And, why does Vaughn care where the absentee votes are counted?  Certainly the Election Board could count them at a central location right now, if it so chose.  But, the Democrats have two votes on the Election Board and the Republicans only one.  So, its time to change the rules.

As I noted much earlier, this is how Republican rewrite the laws when the voters have the temerity to elect Democrats.  Its not about good government, not by a long shot.  Its about Republican party dominance - by hook or by changing the rules after the game has begun.

See Children? Extortion Works !

How do you get the Council Ds to agree to three tax increases, and to funneling money to City coffers from sources never intended to prop up the City budget?  Why you do exactly what Mayor Vaughn did - you slash funding for essential services not controlled by Republican office holders.

Of course, some Ds don't care if we raise taxes and funnel money that is intended for other uses, and some Rs just might privately disapprove.  Not that their vote will count.  Not that your voice and opinion in these matters will be of interest when the legally required hearings are held for show.

Here's what the press release has to say about the deal:

– Indianapolis Mayor Greg Ballard today announced an agreement with City-County Council President Maggie Lewis and the leadership of both caucuses on the framework of a long-term budget plan for the City. Pending approval by the full City-County Council, the agreement will result in the restoration of approximately $32 million in funding to county offices and cut the proposed budget deficit for 2014 to only $6 million.

 

According to the agreement:

 

• The Mayor and Council agree to restore $32 million in County Option Income Tax (COIT) revenue to the County General Fund.

• The Mayor and Council are committed to reducing 2013 operational spending by 5%.  The Mayor and Council will meet with agency directors and elected officials for individual budget reviews with the goal of introducing fiscal ordinances reducing 2013 appropriations accordingly in February.

• The Capital Improvement Board (CIB) will pay the city $5 million for public safety in 2013. The money is currently budgeted for the cost of repairing the Capitol Commons Garage.  In exchange, the City, via the downtown TIF, will fund the cost of repairs.

• The Mayor and Council will approve increases of 2% and 4% respectively in the car rental and admission taxes, effective March 1, 2013.
• An amount equal to 100% of the revenue from the first year of the increase will be directed to public safety (approximately $6.7 million).
• After the first year and beyond, an amount equal to 25% of revenue from this action (up to $3 million per year) will be directed to the City for public safety.

• The Mayor and Council will form a bi-partisan commission to make a recommendation on the elimination of the Homestead Credit Subsidy as part of the 2014 budget. This action, if approved, would generate approximately $9 million in funding for the city.

• The Mayor and leadership of both Council caucuses will hold monthly financial meetings.

• The Mayor and Council will continue working toward the implementation of a Public Safety Foundation by the end of 2013.

These actions taken together will produce a $12 million annual increase in general fund revenue beginning in 2014, leave the City with a manageable $6 million gap between estimated spending versus revenues for 2014, and leave $42 million in operating reserves at the end of 2013.

 

Let's look at the details a bit.  The Council has agreed to raise the admissions tax and the car rental tax - both of which are being introduced tonight.  No sense voicing your opinion in these matters when they go to committee in mid-January.  The Councillors won't even be able to feign interest.  These tax increases were authorized by the State Legislature as part of the CIB bailout package.  However, the City is taking all of those revenues this year and 25% of all subsequent revenues from these increases in future years.  I will be interested in what legal maneuvering they use to launder the funds from the CIB to the City.  It would be a hoot if they use a PILOT.   Hope at least one Legislator is totally pissed at this turn of events.

The CIB is, through the looking glass, going to compensate the City for police and fire protection this year to the tune of $5 million.  In return, the City will use property tax revenues from the Downtown TIF to pay for the $5 million renovation that was going to be the responsibility of the CIB.  So, the Downtown TIF is really giving $5 million to the City.  Just as a reminder, that money is being kept from IPS, IndyGo, IMCPL, and Health & Hospitals.  Sorry children, travellers, readers and sick people.

But, on the bright side, the Mayor's office will start to talk with the Council leadership on a regular basis.  And, they agreed to study a tax increase in 2014 from the elimination of the Homestead Credit.  Surely the Council will stop thinking for itself and just present the Mayor with a rubber stamp instead of doing the people's work.  Surely they will not actually recommend the Homestead Credit continue in 2014.  Because if they don't eliminate it next year, Mayor Vaughn will just slash the County budgets again.

Yes Virginia, extortion works.