Wednesday, July 20, 2011

Indiana Constitutional Debt Limit - How Do Taxing Units Fair?

I am not going to pretend to understand the mechanisms whereby taxing units get around the debt limit set by the Indiana State Constitution.  All I know is that when they want to, there appears to be a way.

I have put together the information as best I could tease it from the information sent to me by the Indiana Department of Local Government Finance and the individual taxing units.

I obviously previously missed a couple more taxing units, including the City of Lawrence.  I will continue to contact these units for their debt information and include it in the table below as well as in my previous post as I get it.

For the Indianapolis Sanitary Districts, I pulled together any bonds that mentioned sanitary.  (they are included in the City-County-H&H-CIB data in my last blog, but pulled out this time)

For the Indianapolis Redevelopment Commission (MDC), I pulled out any bonds that were being repaid from TIF revenues.  (they are included in the City-County-H&H-CIB data in my last blog, but pulled out this time)
I continue to put City and County and Health & Hospitals and CIB together, as H&H claims debt obviously owed by the CIB and the County claims debt obviously owed by H&H.
The debt limit is calculated by the DLGF as follows:  The total Assessed Value of the property that may be taxed by a unit is divided by 3 and that result is multiplied by 0.02 (2%).
With all that said, the taxing units that have less debt than allowed under the Indiana Constitution are noted with an asterisk (**).  Those whose debt numbers I still do not have are noted with a question mark (?).

UnitDebt Limit ($)Debt Reported ($)
IMCPL (Library)**221,605,951100,345,000
Indy Sanitary (Liquid + Solid)"subject to other debt limit"501,391,250
Redevelopment Commission of Indianapolis (MDC)212,373,890269,833,765
MSD Decatur Tnsp7,071,079159,641,968
Franklin Tnsp Comm School Corp11,416,011247,941,361
MSD Lawrence Tnsp29,675,510211,025,794
MSD Perry Tnsp20,627,717145,727,199
MSD Pike Tnsp30,686,22964,185,000
MSD Washington Tnsp33,007,22778,714,000
MSD Wayne Tnsp16,976,955283,699,131
Beech Grove City Sch Corp2,571,30950,110,205
Speedway City Sch Corp**3,844,042no debt
Center Township?29,000,062not reporting
Decatur Township**7,101,9872,093,938
Franklin Township**12,369,9471,193,525
Lawrence Township**32,019,8372,000,000
Perry Township**22,547,734no debt
Pike Township**31,369,419no debt
Warren Township**21,436,824no debt
Washington Township**46,090,982no debt
Wayne Township**26,084,511152,282
Speedway City Civil Town3,844,04274,451,630
Speedway City Public Library**3,844,042205,000
Homecroft Civil Town**150,724no debt
Rocky Ripple Civil Town**114,792no debt
Southport?301,696not reporting
Spring Hill Civil Town**71,049no debt
Lawrence Civil City?8,754,888not reporting
Lawrence City Redevelopment Commission?8,754,888not reporting
Beech Grove Civil City?2,746,786not reporting
Beech Grove Pubil Library**2,571,3091,923,950
Clermont Civil Town?336,605not reporting
Meridian Hills Civil Town?1,258,619not reporting
Warren Park Civil Town?274,211not reporting
Williams Creek Civil Town?501,155not reporting
Wynnedale Civil Town?88,673not reporting


Jon said...

Okay, we have city&county/H&H/CIB at 195% of their debt limit, the airport is 528% of their debt limit and the MDC is at 127% of their debt limit. Collectively those three taxing units are at 230% of their debt limit and yet we keep adding TIFs and more projects; North of South and Busch Stadium. How much of their budgets is now consumed by debt service? Part of Indianapolis's budget problem is the amount of dollars that we need to pay debt service costs. We have a finite amount of tax dollars available; more dollars spent on debt service mean less dollars that can be spent somewhere else.

Had Enough Indy? said...

Jon, you are right that debt service is a significant cost in the overall budget - just ask the school districts.

Over the longer time horizon, though, you have to look at more than just the required payment for a year. You also have to look at the long-term payment schedule for each of the bonds.

For instance the two largest bonds for the United TIF are coordinate in their payment schedules. So, for the one that is to retire in 2013, we are paying about $11.5 m per year now. The one that is to retire in 2017 has basically interest only payments of about $2.5 m per year through 2013, then baloons to $14 m per year after that.

So, it is the entire structure of the bonds that needs to be examined closely, since they have monkeyed with them.

They need to report to the public the total principle plus interest over the term of the bonds before they approve floating them. After all, we pay a hell of a lot of interest on these bonds. And, the longer you put off paying on the principle, the more interest you pay.