OOPS ! That's Different Then, Never Mind !

Well color the 25th floor embarrassed ! Seems Mayor Greg Ballard's press release bragging about Indy being included in Forbes' list of the 40 safest Metropolitan Areas was a tad premature. Turns out the Indianapolis metropolitan area ranks 36th out of the 40 largest such areas in the Country when statistics for the combination of violent crime rate, workplace fatalities (hey ! we're the worst in this category !), traffic deaths (we rank 26th), and natural disaster risk (we rank 19th).

Gary Welsh over at Advance Indiana has already noted the Star article in today's edition, byline by Tom Spalding. At least Tom read the Forbes list before just publishing the Mayor's press release which the Star has posted on its website.

I went to the Forbes list and broke it down by 2008 violent crime rate alone, where Indianapolis metropolitan area comes in 30th of the 40 largest. Here is the ranking for that category:

Violent Crime Rank	Metro Area	MSA Population
1	Portland-Vancouver-Beaverton, OR-WA	2,207,462
2	San Jose-Sunnyvale-Santa Clara, CA	1,819,198
3	Seattle-Tacoma-Bellevue, WA	3,344,813
4	Austin-Round Rock, TX	1,652,602
5	Denver-Aurora, CO	2,506,626
6	Providence-New Bedford-Fall River, RI-MA	1,596,611
7	Pittsburgh, PA	2,351,19
8	Cincinnati-Middletown, OH-KY-IN	2,155,137
9	Minneapolis-St. Paul-Bloomington, MN-WI	3,229,878
10	Boston-Cambridge-Quincy, MA-NH	4,522,858
11	New York-Northern New Jersey-Long Island, NY-NJ-PA	19,006,798
12	Columbus, OH	1,773,120
13	Virginia Beach-Norfolk-Newport News, VA-NC	1,658,292
14	San Diego-Carlsbad-San Marcos, CA	3,001,072
15	Cleveland-Elyria-Mentor, OH	2,088,291
16	Washington-Arlington-Alexandria, DC-VA-MD-WV	5,358,130
17	Phoenix-Mesa-Scottsdale, AZ	4,281,899
18	Riverside-San Bernardino-Ontario, CA	4,115,871
19	Dallas-Fort Worth-Arlington, TX	6,300,006
20	Atlanta-Sandy Springs-Marietta, GA	5,376,285
21	Los Angeles-Long Beach-Santa Ana, CA	12,872,808
22	Sacramento-Arden-Arcade-Roseville, CA	2,109,832
23	St. Louis, MO-IL	2,816,710
24	Milwaukee-Waukesha-West Allis, WI	1,549,308
25	San Antonio, TX	2,031,445
26	Chicago-Naperville-Joliet, IL-IN-WI	9,569,624
27	Kansas City, MO-KS	2,002,047
28	Philadelphia-Camden-Wilmington, PA-NJ-DE-MD	5,838,471
29	San Francisco-Oakland-Fremont, CA	4,274,531
30	Indianapolis-Carmel, IN	1,715,459
31	Charlotte-Gastonia-Concord, NC-SC	1,701,799
32	Tampa-St. Petersburg-Clearwater, FL	2,733,761
33	Houston-Sugar Land-Baytown, TX	5,728,143
34	Baltimore-Towson, MD	2,667,117
35	Miami-Fort Lauderdale-Pompano Beach, FL	5,414,772
36	Nashville-Davidson-Murfreesboro-Franklin, TN	1,550,733
37	Jacksonville, FL	1,313,228
38	Orlando-Kissimmee, FL	2,054,574
39	Las Vegas-Paradise, NV	1,865,746
40	Detroit-Warren-Livonia, MI	4,425,110

I pulled down the 2008 FBI report on the number of violent crimes for a few rather random Cities across the US. Note the Forbes ranking is for Metropolitan areas, not just the major City in that area. Using the population data and the number of violent crimes, I calculated the number of violent crimes per 1000 people. All other numbers are from the FBI report. The cities are arranged alphabetically in the next table. If you'd like to peruse the entire list yourself it is found at : 2008 FBI Crime Statistics data set

City	Population	Violent crime	Violent crime per 1000 people
Boston	604,465	6,676	11.0
Detroit	905,783	17,428	19.2
Indianapolis	808,329	9,735	12.0
Los Angeles	3,850,920	26,553	6.9
Miami	427,740	5,709	13.3
New York	8,345,075	48,430	5.8
Oakland	401,587	7,905	19.2
Philadelphia	1,441,117	20,771	14.4
San Francisco	798,144	6,744	8.4

City	Murder and nonnegligent manslaughter	Forcible rape	Robbery	Aggravated assault
Boston	62	237	2,398	3,979
Detroit	306	330	6,115	10,677
Indianapolis	114	475	4,023	5,123
Los Angeles	384	949	13,422	11,798
Miami	63	42	2,415	3,189
New York	523	890	22,186	24,831
Oakland	115	338	3,323	4,129
Philadelphia	331	1,038	9,618	9,784
San Francisco	98	166	4,108	2,372

The FBI Uniform Crime Report does caution about comparing different cities crime rates as these are self-reported numbers. But, they are also the best information we have. In the Star article Robert Vane, spokesman for Mayor Ballard, reiterated the claim that the Indianapolis crime rate has dropped 6% since Ballard took over in January of 2008; but no details have been forthcoming. The FBI has not yet released its report for 2009, so we also have no benchmarks for comparisons.

At the end of the day, the Ballard administration's over eagerness to bathe itself in self-congratulations is an excuse for us to look at the success or failure of our City's crime prevention efforts through a broader lens than we normally do. It is of concern that we rank worst of the 40 largest metropolitan areas for deaths on the job. That should be a wake-up call. It is of concern that New York, San Francisco, Chicago, and Washington DC (of all places) metro areas are all 'safer' than the Indy area when it comes to violent crime. I guess the question is, does the Mayor look at crime the same way? Or is his administration cherry picking the statistics that show his efforts in their best light? Just like they were trying to do by celebrating our ranking on the Forbes list.

Supplemental Deduction Makes Property Taxes Regressive

Everyone has received their property tax bill for 2009 and the topic is hot once again. There is a lot of talk about the insufficiency of the tax caps because assessed values rose in many places. The folks whose AVs declined must be out celebrating because they are not piping up. I must reiterate, though, that tax caps do play a role in damping down any tax increases provided by your schools, your city or town, your township government, or any municipal corporation like libraries or county health & hospitals. Remember - that is the source of the problem - folks who think its fine and dandy to spend more and more of your money. Mathematically, the assessed value (AV) is indeed a variable in the equation that is unfettered. Socially, the assessed value is the source of much concern and often cited as the place where elected officials can get the money they want by illegally increasing the value of property beyond its market value. According to documents posted on the State Department of Local Government Finance, the total Assessed Value of the Marion County rose from $402,782,369 for the 2008 budget to $405,066,609 for the 2009 budget. It is the latter for which we are now paying property taxes. But, that represents an increase in AV of just over half a percent (0.567%). If you believe that your property was assessed incorrectly, please file an appeal. You can do that by visiting the County Assessor website's "Property Tax Appeals" page. You have 45 days from receipt of your bill to file an appeal - so do it today !!

A little noticed aspect of the property tax formula turns the egalitarian-sounding tax caps upside down. That is the "Supplemental Deduction" - line 2b for those following along at home. Line 2a is the old "Homestead Deduction" that every owner occupied residential property receives - total of $45,000 or 60% of the gross AV, whichever is less. The supplemental deduction is 35% of the next $600,000 of AV, followed by 25% of any AV over $645,000. You can find that information and more on the County Treasurer's FAQ page.

I backward engineered the tax bills to see the effect of these deductions on the tax rate required to make homeowners hit the property tax caps. This ignores other deductions that can be applied to a property tax bill due to some aspect of the homeowner or their finances. Your final bill will also be affected by the credits for property tax relief that are being phased out.

A million dollar home would get $45,000 + $210,000 + $88,750 = $343,750 total deductions (homestead plus 35% supplemental plus 25% supplemental). So, by my calculations, the tax rate would have to hit 1.5% before the million dollar home hit the 1% cap.

A $600,000 home would get $45,000 + $194,250 = $239,250 total deductions and the tax rate would have to hit 1.7% before this home hits the 1% cap.

Whereas a $100,000 home would get $45,000 + $19,250 = $64,250 total deductions and the tax rate would have to hit 2.8% before that home hits the 1% cap.

And lastly, a lowly $50,000 home would get only $30,000 deduction (can only deduct up to 60% the AV of the home with the homestead deduction) and the tax rate need only be 2.5% before that home hits the 1% cap.

So, the million dollar mansion hits the protection of the caps before lower priced homes. The protection of the caps is further away as your property's assessed value fades from the mansion level until about $75,000 in assessed value, where the situation slowly begins to reverse.

For the 1.5% property tax caps -- the million dollar mansion hits that cap when the tax rate is 2.3%, the $600,000 home hits when the rate is 3.8%, the $100,000 home hits when the rate is 4.2%, and the $50,000 home hits when the rate is 3.5%. So, those who hit the caps this time are more likely to be your very expensive homes or your extremely inexpensive homes.

It sure would be nice if all were treated equally or, gasp, if those more able to pay were charged a higher rate.

"Hair Today"

New ad for Andy McKenna for Governor of Illinois.

The Consequences of a "NO" Vote on the Wishard Referendum

Take heart if you have been considering voting "NO" on the Wishard Referendum. Should the outcome be "NO", Health & Hospitals can continue forward and still build their new campus. The only thing that would change is that H&H would be banned from raising your property taxes to pay off the bonds. They have said all along that they can pay off the bonds with ongoing profits from Wishard. All they have to do is float revenue bonds. And, they could have floated revenue bonds without holding a referendum.

Hold them to their promise not to raise your property taxes. Vote "NO" on the Wishard question. You will not be forcing them to live with burst pipes. You will not be forcing them to live without a new campus. You will only be forcing them to be true to their word - that they will not use property taxes to repay the bonds they use to finance the project.

City-County Council to Meet Monday, October 26

The red hot smoking ban is one item on Monday night's agenda of the City-County Council. To its credit, the Council office has posted the amended proposed ordinance on its website. The full agenda can be found using this link.

The smoking ban, Proposal 371, introduced by Councillors Hunter and Mansfield, now has Councillors Evans and Malone signed on as sponsors. Prop 371 passed out of the Community Affairs Committee on October 14 with a do pass recommendation by a vote of 4-2. The minutes of that meeting are not yet posted, so I do not know which Councillors voted which way on the very tough issue. Those on the Committee include Councillors Speedy (chair), Bateman, Day, Hunter, Lewis, Minton-McNeil (likely absent), and Smith.

A not-hot and mildly worded proposal will also be voted on Monday night - Prop 378, which is a Special Resolution that "supports FedEx Express operations and the City of Indianapolis", introduced by Council President Bob Cockrum. I looked it up because FedEx is an operation situated mostly in Decatur Township, where it is shielded from paying its full due of property taxes because of sweetheart deals with the Airport Authority. The language of the Resolution is really vaguely worded, and as it turns out, deliberately so. Here is the key whereas clause:

WHEREAS, Congress is currently reviewing a 230-word provision in the FAA
Reauthorization Act of 2009 (H.R. 915) which unfairly targets FedEx Express and
could lead to disruption and job loss at the FedEx Express Hub;

Nowhere does the Resolution get any more clear than that. So, I Googled "Fed Ex Express HR 915". Turns out the FAA Reauthorization Act of 2009 would change the sweetheart deal Fed Ex has gotten for decades to be under the Railway Labor Act and not the National Labor Relations Act for the purposes of union organizing. See here for more detail. And the Fed Ex union view here. UPS is governed by the NLRA, by the way. Seems to me that any loss of jobs would be Fed Ex's doing. This is a wayward proposal that is deliberately weasel-worded to cover up its anti-organizing position. Prop 378 passed the Rules & Public Policy Committee on October 13 with a do-pass recommendation vote of 5-1. Those members present were Councillors Lutz (chair), Cockrum, Gray, Malone, Pfisterer, and Plowman. I can guess how they voted, but I do not know for sure. During the Committee meeting, Councillor Cockrum mentioned that he and Councillor Vaughn were approached by the head of the Indianapolis operations of Fed Ex to put forth this resolution that urges Senators Bayh and Lugar to vote against this provision of HR 915.

Surprisingly enough, there appears to my eye to be no thrilling Proposals in the batch to be introduced on Monday night.

Buyer's Denials Don't Ring True

On Sunday, October 18, 2009, the Indianapolis Star published a front page story about Congressman Steve Buyer's Frontier Foundation (Rep. Buyer's scholarship fund hasn't helped a single student), a foundation that has taken in nearly $1 million but expended no scholarships - the purported mission of the Foundation. Mary Beth Schneider and Maureen Groppe get high marks for finally getting Rep. Buyer to admit that it was in fact his Foundation. Others, including me here this past week (Buyer supporting fake charity), have written about the Frontier Foundation.

In today's paper we have a Star editorial about the Foundation (Let's see good deeds, Mr. Buyer), a cartoon by Gary Varvel that is none too complementary, and a letter to the editor by Buyer himself (Foundation operates legally, aims to help students).

In all of his denials and all of his they-are-attacking-me retorts, is there any truth? One more piece of information puzzles me and leads me to ask, was Representative Buyer trying to hide the fact that no scholarships were granted EVEN ON HIS FOUNDATION TAX RETURN?

If you look online at Guidestar.org, you can get access to the Frontier Foundation, Inc., 2006, 2007, and 2008 Forms 990-PF; the tax return form for private foundations. In each year, the tax form has an attachment of an application form, dated for the appropriate year, for the purported scholarship. The attachment to the 2006 tax form is entitled 'The Frontier Foundation Scholarship Application 2006' and it shows a due date of March 1, 2005. Likewise the 2007 tax form has an identical attachment, except the title has 2007 and the due date is March 1, 2006. Same situation for the 2008 tax form - purported scholarship application with a title date of 2008 and a due date of March 1, 2007.

Below is the top half of page 1 of the two-page 2006 scholarship application, chosen for its clarity.

Looks to me like the folks at the Frontier Foundation wanted the IRS to think they had an active scholarship program.

What If....

What if the Wishard project referendum fully disclosed :

the cost of the project (maximum of $703,040,000),
the term of the bonds (maximum of 30 years),
revealed that the bonds would be secured with property taxes,
the lease arrangement with the Indianapolis-Marion County Building Authority,
that there would be two or more buildings whose function related to medical care,
that there would be one or more garage and/or parking lot,
that there would be a power plant built,
that the maximum annual payment would be $54,807,604,
which could end up with a maximum increase in the property tax rate of $0.1474 per $100 of assessed value,
and that the tax increase would be outside the property tax caps (so homesteads would pay up to 1% of gross assessed value PLUS up to $0.1474 per $100 of net assessed value)
that the total debt owed by all taxing units in Marion County secured by property taxes is $2,160,112,176,
that the maximum interest rate for the bonds would be 6.1.%,
that the maximum interest to be paid over the life of the bonds would be $830,478,858,
and that none of the preceding included the $120 million to be obtained through the Build America bonds (which is used to pay down interest) or the $150 million that Health & Hospitals has stashed away already for the project ???

What if they included in the referendum the very information they were required to publish in the public notice? Required to publish because it is pertinent information for the voters?.... What if they included that information in the actual referendum question?

At the end of the day I must assume that the reason they chose to be relieved of the onus of full disclosure in the referendum question, is that they were worried the public would reject their project due to the property tax guarantee for the repayment of the bonds.

Matt Gutwein, CEO of Marion County Health and Hospitals, Corp., says that they fully intend to repay with ongoing revenues, but are proposing bonds secured with property taxes because the interest on that type of bond is lower. That would be true if the bond buyers are reluctant to believe that the ongoing revenues are a sure thing for the next 30 years. Which of course begs the question, if savvy investors would reject the notion of an ongoing profit for Wishard, why should a savvy voter believe it?

But, anyway, what if full disclosure was the approach the Wishard folks had taken. What would the discussion then be? Well, I think it would be a closer scrutiny by the public of the cost figures, the proposed assortment of buildings, the amount of financial support Wishard should be getting from the IU School of Medicine, and how costs could be trimmed to simultaneously accommodate the needs of our County Hospital and be frugal with taxpayer dollars. Important points when you are the one who must repay the bonds with taxes you pay on your property. Not so important if you consider it all 'free'.

If H&H were to switch entirely to revenue bonds to finance the project, then no referendum would be needed. Looking at it the other way, if the outcome of the referendum is 'No', then H&H can still build its new Wishard campus, it just would have to switch to revenue bonds.

The County Hospital purpose fulfilled by Wishard is a very important one. It is an obligation, in my view, to be sure everyone can get access to medical care regardless of ability to pay. And, I do think it should be in decent facilities.

Here are the questions I would raise if the property tax issue were either fully disclosed or taken off the table:

What is the expected cost of each building?

Given the per square foot cost of the power plant is $1335.55, how much do you need that building? Will it generate efficiencies? If so, how long before the cost to build is recouped through the efficiencies? Would IUPUI or IU Medical School share in the utilities produced by the plant? If so, why are they not helping to pay for it? Would the plant generate energy through a green technology?

The 'faculty office building' -- who is it for? IU School of Medicine faculty? If so, why isn't IU helping to build that building?

In any case, why doesn't IU School of Medicine chip in for the cost of the new hospital or even pay an ongoing access fee for using it as a teaching hospital? They certainly gain from having new facilities to teach in and the faculty certain pull down added income by using the hospital and offices for a private practice on top of their teaching and/or research duties. IU School of Medicine charges tuition - why should they get the use of a teaching hospital for free?

Would you disclose the latest cost per square foot of comparable hospitals that were used for your projected costs?

How many beds would the new facility have and how many does the current facility?

Will the parking garage be just for patients and doctors, or would parking by University and/or School of Medicine personnel also be allowed. If the latter, why aren't those institutions chipping in for the cost of increased parking on their campus?

How does the Wishard role as the County Hospital include an outpatient facility? Perhaps I need an explanation of what indigent care is required and what care is provided for profit by Wishard. How much of the outpatient facility is for profit, and how much to fill a need that the other medical enterprises in town cannot fill.

Will the furniture and equipment in the current facility be moved to the new facility? Or, will it all be junked and all brand new equipment and furniture provided by the project? How much of the total cost is represented by new furniture and equipment?

And last but not least, the project you are proposing would increase the total Marion County debt secured by property taxes, by a whopping 33%. Is it wise to have so much debt or for so much of it to be encumbered by just one project?

Those are the questions that would come to me about this project if Gutwein and Co., weren't out there selling a referendum legally required because of bonds secured with property taxes, all the while saying they will not raise property taxes to repay the bonds. I think we deserve honesty from our government, even if it means they won't get their pet project built. At the end of the day, it isn't their government or their project, it is ours.