Airport City - A Scam On Taxpayers and Free Markets

Tomorrow when the Airport announces its multi-county effort to create an "airport city", I will be traveling.  I'll not be able to address for another week, their claims of being an economic development engine that we should all get behind.

However, I do know a lot about this airport city, as they have been moving it along a high speed track for a couple of years now.  I do have some things to say that will undoubtedly stand up to whatever outrageous claims they make tomorrow.

The basis of the airport city is that the Indianapolis Airport owns thousands of acres of land that they do not need for either aviation or security purposes.  The old terminal and old parking lot space along I-465 will be familiar to most folks in Indy.  The acreage has either outlived its utility for aviation, or was purchased with federal dollars through a noise abatement program.  The community has always been told these parcels would be bundled and returned to the tax rolls.  Now the Airport wants to keep them off the tax rolls, so that the Airport can get its fat cut.

I do hope they are asked how many acres are actually involved - specifically for each county.  I'd hazard a guess from maps that it is hundreds of acres in Marion County, approaching one thousand, if not reaching it.  And there are a thousand or two combined in Hendricks and Morgan Counties.

There are three reasons for all residents of our area to oppose this plan.

1) it keeps significant swaths of land off the tax rolls that could be contributing property taxes.  This would help reduce the average tax burden of current property owners AND, simultaneously, add much needed additional revenue to pay for basic services - schools, libraries, police and fire, to name a few.

2) the excess land is being kept so that the Airport can charge companies a 'lease payment' for the land upon which they would build.  This is why the Airport wants to do this airport city - to make tens of millions to hundreds of millions of dollars a year - without having to dirty their image by asking for a cut of property taxes.

3) it is very likely, if not guaranteed, that the lease payment will be less than a company would have to pay in property taxes on that land, had it been returned to the tax rolls.  This gives an unfair advantage to companies locating on airport property.  The Airport would also demand other tax incentives, undoubted, to lure tenants.  All taken together, the Airport would become a competitor to neighboring industrial parks who are trying to make it the American way - through the free enterprise system.

The Airport does not go through the regular zoning process, although the Courts have decided that they must.  They have no standards and really don't care what eyesores they create next to privately owned property.  Take for example, the travails of Dee Wilson.  Wilson owns property abutting the north east corner of the Airport, right near Washington Street.  He had interest in his parcel until the Airport let rust buckets of shipping/semi containers be stored next to his property.  All interest is gone and the Airport has offered less than 50 cents on the dollar.  Wilson has declined their 'offer'.

The Airport is currently offering buyers of the United Maintenance Facility bonds 10 cents on the dollar.  Even though the Airport made $75 million in cash profit last year, they have no conscience in low balling folks who thought they were trustworthy.

The Airport is trying to expand the footprint and role of local government, to create a local fiefdom - and taxpayers and the free enterprise system will pay the price.

Increased Ticket and Car Rental Taxes, Mid-North TIF and Charter Schools - How They Voted

Last night the City-County Council voted to raise the admissions tax from 6 to 10% (Prop 23) and the car rental tax from 4 to 6% (Prop 24).

Councillor Cain, a Republican, was absent.

Admissions Tax Increase --

Voting for were Democrats Barth, Brown, Hickman, Lewis, Moriarty, Osili, Robinson & Talley and Republicans Shreve, Gooden, Holliday, Hunter, Lutz, McQuillen, Miller & Pfisterer

Voting against were Democrats Adamson, Evans, Gray, Mahern, Mansfield, Mascari, Oliver & Simpson and Republicans Freeman, McHenry, Sandlin & Scales

Car Rental Tax Increase --

Voting for were Democrats Barth, Brown, Hickman, Lewis, Moriarty, Osili, Robinson & Talley and Republicans Shreve, Freeman, Gooden, Hunter, McHenry, McQuillen, Miller &  Pfisterer

Voting against were Democrats Adamson, Evans, Gray, Mahern, Mansfield, Mascari, Oliver & Simpson and Republicans Holliday, Lutz, Sandlin & Scales 

Democrats each voted the same on each tax increase.  Republicans Freeman and McHenry voted no on the ticket tax and yes on the car rental tax, while Holliday and Lutz swapped with them to vote yes on the ticket tax and no on the car rental tax increases.

In both cases there were just enough votes to pass the two tax increases.  So, the new Councillor Shreve can be said to have cast the decisive vote each time.  Shreve's qualifications to serve as a Councillor have been called into question due to residency issues. [edited to add: I've had a brain meltdown - it takes 15 votes to pass an ordinance by a simple majority, so Shreve was a cushion of one vote]

Meanwhile, Prop 291, the Mid-North TIF that adds another square mile to Indy's already burdensome TIFs saw a motion to amend and a vote.

The bright star of the Council's freshman class, Zach Adamson, introduced an amendment to exclude the Broad Ripple parking garage from the TIF.  This garage is being built with $6.4 million of taxpayer funds, which we all were told would be recouped in property tax revenues.

The vote to amend was defeated, with 6 voting yes and 22 voting no.

Those voting yes were Democrats Adamson, Brown, Evans, Mahern & Oliver and Republican Scales

Those voting no were Democrats Barth, Gray, Hickman, Lewis, Mansfield, Mascari, Moriarty, Osili, Robinson, Simpson & Talley and Republicans Shreve, Freeman, Gooden, Holliday, Hunter, Lutz, McHenry, McQuillen, Miller, Pfisterer & Sandlin 

The vote to pass the proposal garnered 23 yes votes and 5 no votes, with Evans and Oliver siding with the yes votes and Holliday moving to the no vote camp.

Those voting for the TIF were Democrats Barth, Evans, Gray, Hickman, Lewis, Mansfield, Mascari, Moriarty, Oliver, Osili, Robinson, Simpson & Talley and Republicans Shreve, Freeman, Gooden, Hunter, Lutz, McHenry, McQuillen, Miller, Pfisterer & Sandlin 

Those voting against the TIF were Democrats Adamson, Brown & Mahern and Republicans Holliday & Scales

On the 4 Charter Schools proposals, here are those voting no on each:

Prop 429 (Excel Center Lafayette Square) Democrats Evans and Oliver

Prop 430 (Indiana Math and Science Academy - South) Democrats Evans, Lewis, Oliver & Robinson

Prop 432 (VBP Indy, Inc) Democrats Evans, Lewis, Oliver & Robinson

Prop 433 (Vision Academy) Democrats Evans, Lewis, Oliver & Robinson

All other Councillors (except Cain, who was absent) voted for.

Council Meets Tonight - Hold Onto Your Wallets

The City-County Council meets tonight.  Increasing your taxes and siphoning off property taxes from known future development to pay for corporate tax handouts instead of cops, are on the agenda.

The Council will vote on raising the local car rental tax from 4 to 6% (Prop 24) and raising ticket tax from 6 to 10% (Prop 23).  They will also vote on Prop 448, which puts back the nearly $32 million Mayor Vaughn slashed from County Office 2013 budgets; a move that made no fiscal sense, just created blackmail fodder.  These are all to have public hearings, as they are fiscal ordinances.

Prop 291, the Mid-North TIF, will be voted on as well, but no public hearing is to be held.  This plan specifically removes property taxes derived from the taxpayer-funded Broad Ripple parking garage from common good uses, like paying for public safety in places like Broad Ripple, to paying for public art near Broad Ripples innumerable bars and park upgrades to Tarkington Park.  Developer driven tax handouts are anticipated within the 1 square mile of the TIF district as well.  If things go well, Mapleton-Fall Creek, an actual area of need, just may get a project financed with TIF dollars.

Among the Proposals being introduced tonight is Prop 33, sponsored by Councillors Talley and Robinson, which directs DPW to use $3 million of its 2013 RebuildIndy funds for Avondale-Meadows infrastructure improvements.  This proposal is being offered to substitute for the expansion of the Fall Creek Place TIF which proponents hoped to use to attract a grocery store.  These proponents now suggest more investments of TIF dollars were also hoped for, once the grocery was in place and the TIF fund grew.   I do not know what those projects were expected to be or if they simply expected to spend any and all TIF dollars that amassed beyond the initials needs.

Also likely making an appearance is newly selected Councillor Jefferson Shreve, whose residency qualifications for that office were called into question over the weekend.  Selected Saturday morning, questions arise, trail of documents unearthed by Saturday afternoon.  Somewhere in that time, they GOP hastily swore Shreve in.  You can read all about it on the Advance Indiana and Ogden On Politics blogs.

Great Digging, Gary Welsh !

Gary Welsh, author of Advance Indiana, has once again scooped mainstream media.  This time his digging uncovered a residency issue for newly selected City-County Councillor, Jefferson Shreve.

Seems the breadcrumbs lead to Bloomington, and not so much to Indianapolis.  There is a record of Shreve's Marion County voter registration in October 2011, but no other links beyond rental property owned in Perry Township.  Meanwhile Shreve holds numerous board seats in Bloomington, some of which say he is a Bloomington resident.

But, read it for yourself - great work Gary !  "Marion Co. GOP Imports Bloomington Resident To Fill Cardwell's Council Seat"

This also illuminates the reason behind Indiana Senator Mike Young's SB621 inclusion of a reduced residency (from 2 years to 1) for Councillors and (from 5 years to 2) for Mayors to take their seats if elected or selected.

Over at Ogden On Politics, Paul Ogden ("Does the Newest Indianapolis Council Member Satisfy the Two Year Residency Requirement?") brings up the question of homestead credit, and in which City is Shreve claiming one?  Monday morning should be interesting for public document requests at City Hall.

It is certain that this mess needs to be completely cleared up before Jefferson Shreve is sworn in as Councillor Shreve and votes to increase two of our (real Indy residents) taxes and increase our TIFs by yet another square mile tomorrow night.  The Council has had a shaky record of following its own rules this past year.  This one should not be let to slide - its too important.

Mass Transit - At Least Respect the Taxpayers Enough To Show Us the Numbers

Yesterday's Indy Star had a letter to the editor from a George Hodgson of Noblesville.  I'd provide a link to it, but I cannot find any trace of it on the IndyStar website.  Even a Google search using the text of the letter was not helpful in finding it.

The headline was "Voters deserve honest on transit's real costs".  The author complimented Andrea Neal for her recent editorial, suggested folks read Wendell Cox's Urban Transport Fact Book, Breach of Faith: Light Rail and Smart Growth in Charlotte.  His last paragraph struck a cord with me:

As for Indy Connect, I have yet to read anything but the most rudimentary estimates of cost to the taxpayers and no discussion about ongoing operational costs.  Before we go to the ballot on this high-cost, high-risk question, taxpayers should be provided with this information as well as ridership estimates and break-eaven opertational costs.  What will happen if there are shortfalls, as Neal suggests?  Raise the county income tax again?  Higher sales tax? Or higher property tax?  Local politicians and the promoters owe taxpayers an honest discussion.
 

Amen.

I have been trying for over 4 years to get more than the cursory numbers regarding the series of mass transit plans.  My latest effort was Saturday, when McANA's guest speaker was Lori Miser, Director of  DPW, who promoted the current mass transit plan.  We shall see if any real financial information is ever given to the public.

Here is what limited information I've been able to find.  IndyConnect.org has so little financial information, it should be a crime.  The entire funding page text fits in one screen, and mentions the 0.3% income tax, the $1.35 billion 10-year buildout, and $1.38 million per year operating costs after phase I is complete.

IBJ reporter, Chris O'Malley ferreted out the most detail.  In his December 13, 2011 article (yes over one year ago) he had this breakdown of revenue that he attributed to the Central Indiana Task Force:

Capital revenue (in millions)
Long-term bonds                             $481.8
Federal New Starts                          $294.6
Operating revenue contribution       $179.4
Federal Grants to IMPO                   $159.6
Federal urban funds (1)                    $135.4
Tax-increment revenue (2)               $  42.4
TOTAL                                                 $1.3 billion
 

Annual operating revenue in 2021 (in millions)
Transit tax (0.3%) on income           $89.3
Fare receipts                                      $28.8
Marion County property tax (3)        $21.0
State transit funding (3)                     $12.6
TOTAL                                                   $151.7
 

(1) includes money already allocated to IndyGo bus system
(2) generated from tax increment financing revenue at stations
(3) largely what currently is allocated to IndyGo
 

So, they ARE intending, and in fact relying, upon TIF districts sucking up all of the economic development benefits that might be spurred by the rail line.  It is interesting that the annual operating costs are significantly higher in this estimate, than the $135 million per year being tossed around in other articles and sources.

O'Malley also notes that about half of all the cost will be due to the lone rail line proposed for phase I:

— Operate a 22-mile rail line between Union Station and Noblesville atop the Nickel Plate rail corridor by 2021. This is the most expensive element in the $1.3 billion plan, at $625 million.

In an article just one month earlier, O'Malley dissects the fare box contribution to operating expenses.

“We anticipate that we’ll receive fare box revenue equal to about 25 percent of operating costs,” said Ehren Bingaman, executive director of the Central Indiana Regional Transportation Authority.

That would be an improvement over what Indianapolis’ bus line, IndyGo, received from fares last year—amounting to 17 percent of its $57.4 million pot of operating money. Most of that $57.4 million came from local, state and federal tax dollars. Capital projects are funded separately, mostly from federal grants.

In theory, the more money raised from the fare box, the less public subsidy is needed. With an estimated cost to build of $2.5 billion and annual operating budget estimated at $135 million, the issue is not insignificant.

If you grab your calculator, you'll see that the estimate from the Central Indiana Task Force was for fares to support 19% of the annual operating costs.

And here are some fun facts. 

>>Looking back through O'Malley's various reports, we find the average taxpayer contribution to be consistently $180 per year, even though the plan is scaled back repeatedly over time.

February 10, 2010 - $6.7 billion plan - costs $180 per taxpayer per year
November 8, 2010 - $2.4 billion, 25-year plan - costs $180 per taxpayer per year and half the cost would come from federal grants
November 19, 2011 - $1.3 billion, 10-year plan - costs $180 per taxpayer per year

>>Currently before the Legislature is HB1011, the mass transit bill.  The Legislative Services Agency does an analysis of the state and local government financial impact of each bill.  They find some interesting things about HB1011.

In 2011, 16% of IndyGo's operating budget came from fares
In the next few years, a 0.3% increase in income taxes for Marion and Hamilton County residents would generate about $85-90 million
 

>>The bill itself (page 47 of the pdf) anticipates and allows a TIF district to be created 1/2 mile on either side of any rail line made a part of the mass transit system - which amounts to 15-16 square miles in Marion County alone for the single line planned for phase I - with the revenues split between the transit authority and the City of Indianapolis.  Unfortunately, LSA did not analyse the TIF aspect of this bill.

>>On page 38 of the pdf of HB1011, you'll note that even though the newspapers are reporting a referendum in 2014, the bill itself authorizes a special election on November 5, 2013.

Any taxpayer who wants to be informed about the costs of the mass transit proposal has to do a hell of a lot of digging on their own and then decide if the information is out of date.  The mass transit proponents have an ethical duty to have the most current, most accurate financial breakdown readily available on their website.  I'd just advise that the public not hold its breath waiting.

 

 

 

Guest Post - I-69 Coming Undone in Tennessee

From Thomas and Sandra Tokarski - CARR, Citizens for Appropriate Rural Roads:

The prospects for a completed I-69 are falling apart not only in Indiana but also in Tennessee and possibly in other states. 

As this article shows [see Citing Lack of Funds,Tennessee Calls Off $1.5 Billion Highway Project], Tennessee is done with I-69. Neither Kentucky nor Indiana have money to build the new bridge over the Ohio River, and Indiana has run out of money to complete the highway to Indianapolis. It is important to remember that many of the presumed economic benefit of I-69  are based on a completed Canada to Mexico route and, in Indiana, on a completed Evansville to Indy route. Neither route is likely to be completed any time in the near future, if ever. 

For years CARR has stated that Indiana does not have the money to complete I-69. But state and federal officials insisted that we were wrong. Well, what do they say now--don't worry we will come up with something; maybe it can be a toll road. 

Given this reality, it would be a travesty and an unforgivable shame to clear-cut, blast and bulldoze Section 4 through environmentally sensitive Greene and Monroe Counties when I-69 will never deliver the benefits that have been touted by its supporters. I-69 will never pay for itself. In addition, Indiana is frequently rated among the worst states for various aspects of environmental quality. In the long run building, I-69 will be very harmful to the economy of Indiana as well as to our quality of life. I-69 is fast becoming a monumental boondoggle.

Our state has many more transportation needs and far less destructive ways to spend billions of our tax dollars than continuing to throw scarce money at I-69.  A recent report by our colleagues at the Hoosier Environmental Council [ I've uploaded this document to Google Drive - click here] points out that this year Indiana wants to spend 40% of its discretionary funding, $366 million,  just on Section 4 of I-69. The total cost of Section 4 is likely to be well over $600 million.This cannot be justified when Indiana is not able to maintain the roads and bridges we already have. 

Governor Pence wants to take $347 million from the state's pension fund for transportation and other infrastructure projects. We believe that I-69 is sucking a huge hole in INDOT's budget and is taking funding from other projects across the state. Maybe we can finally agree on one thing--I-69 is not about progress. 

When politicians in Tennessee say: "The state wants to build places people want to go to and not just through at high speeds. (emphasis added) they are showing more common sense than Indiana politicians who say: let's continue spending billions of dollars and trash the environment by building I-69 even though we can't maintain the roads we have and don't have the money  to finish this one. People hearing this are beginning to look at Indiana and shake their heads in disbelief.  

Thank you for your enduring support.

Best regards,

Thomas & Sandra Tokarski

Let's Recap Where We Are At This Moment - Or - How The Diversion of Tax Dollars For Special Interests Is Going

It just feels like a good time to recap where our City finances stand.  Let's face it, you simply have to follow the money if you want to know what the priorities really are.

For the first couple of years of the Great Recession, the City's funding actually went up.  Last year and this, resources shrunk slightly.  Contributing to that was the erroneous calculation of income tax receipts, which the State has corrected with a lump sum payback and which has been deposited into the rainy day fund to spend next year.

The amount of potential revenue caught in the tax caps is growing, causing an corresponding decrease in revenues that the City qualifies for, but cannot collect.  The growth in tax caps is being driven by the increase in the amount of property value being pushed into TIF districts.  TIF districts continue to struggle, on the whole, requiring bailouts, transfers, and increased taxes to cover debt payments.  The city has $80 million from RebuildIndy funds sitting in an account; its sole purpose to convince bond rating agencies that we have enough money to cover our debts, at least for one year.  Meanwhile, the airport tries to shake down bond holders of the United TIF deal to accept 10 cents on the dollar.

We see a City-County Council approve two TIFs last year - one for a burgeoning area seeing ever increasing private investment - growth that was the 'old fashioned way', through a free market.  We see a proposal for development of a very valuable, city-owned block, being granted to a group who wants the block for free, plus millions in taxpayer assistance; not to the group that asked for tax abatements, but who was actually willing to pay for the block.  This pulls tax revenue from all taxing units and causes a reduction in the services that can be provided for the common good.

We see a City-County Council ready to approve one new TIF, which covers some of the most affluent areas of the County, along with one area of actual need, to fund public art and park improvements as two of the named uses for tax funds.  BTW, they have the temerity to also complain about crime as they move to strip off tax dollars that would have gone to fund public safety.  This, too will pull much needed tax dollars away from the common good.  In fact, they will take more than $6 million of promised tax revenue from the Broad Ripple parking garage away from the common good to make life more fun for some of our toniest neighborhoods.

We see two new tax increases on the verge of being passed that will be split between the City and the CIB.  The State Legislature granted the ability to raise these taxes as the final step in the CIB bailout.  One might wonder, if the CIB doesn't need the money, why would you raise the taxes? 

We see the formation of a public safety task force whose sole purpose is to make a case for higher taxes - once the mass transit tax referendum passes out of the State Legislature.  As we pull more money from our resources that pay for the common good, crime will rise.  Fearful residents are more willing to support a tax increase to pay for police protection that the City could have afforded had our City Fathers and Mothers not diverted money into TIFs and stadiums.

We see yet another $10 million going to the Pacers and their billionaire owners, who already get all revenue from the facility we taxpayers built for them.  Another deal is likely already written, but which will be kept from the public until the tax increases are finalized.  Even the CIB gets tripped up simultaneously saying they have enough money to give more of it away and that they may have to declare bankruptcy.

We see heavy hints that the taxpayers will soon be asked to build one of the Mayor's biggest campaign contributors a $200 million soccer stadium.

What is clear is that we are moving money into accounts that pay for corporate welfare, payback for campaign contributors, and sports welfare.  We see accounts shrinking that pay for the public good - good parks, good schools, and public safety to name some.

That's what is happening folks.  Follow the money.  The priority is not the public; the very public that trusted these folks enough to vote for them.   The priority is not to make Indy a better place to live.  The priority is not the common good.

Councillor Scales Reacts to New Funding Mechanism for Avondale-Meadows

Councillor Christine Scales, co-sponsor of the proposed expansion of the Fall Creek TIF she had hoped would be used for the benefit of Avondale-Meadows residents, reacted on Facebook to the news the Councillors Talley and Robinson would introduce a proposal with an alternate funding mechanism.  Scales is a Republican, while Talley and Robinson are Democrats.  Here is her post:

News to Me: Talley&Robinson coming to aid of Avondale Meadows It would have been helpful for any of the committee members who voted against the Avondale Meadows TIF to have shared their concerns with me before the MDEC meeting, when it was voted to be tabled. The co-sponsor, Councillor Steve Talley never shared any misgivings with me. It was obvious through Talley's prepared statement, and the ready agreement by others who opposed the TIF, that they never intended to consider testimony given during the meeting. The decision to oppose was made prior to the meeting's start. Now,Talley and Robinson are sponsoring a new proposal in my district without any discussion first with me, the councillor, representing the Avondale Meadows District. I have to mention that the TIF was needed not just for a grocery store but to advance further revitalization in the area. I don't need to be psychic to know that whatever these two D's propose will pass. There will be no record of them ever having voted against the TIF, as the proposal will die due to tabling. The D's will get credit for "helping" the neighborhood and no Republican will receive any credit for years of committed work in the Avondale Meadows area-which was the D's motive for not supporting the Avondale Meadows TIF all along."

Different Funding Mechanism To Be Proposed for Avondale-Meadows Area

Councillors Steve Talley and Leroy Robinson will introduce a proposal to the Council on January 28, that will include alternate funding to substitute for the failed Avondale-Meadows TIF proposal. 

The Metropolitan & Economic Development committee tabled indefinitely (AKA - killed) Prop 349 Monday night.  Prop 349 was passionately presented and championed by Councillor Christine Scales (see "Case for Meadows TIF")  That proposal included an expansion of the Fall Creek TIF to assist the Avondale-Meadows area in attracting a grocery store.  The TIF would exist for 25 years, even though the grocery store project bonds likely would have a term of only 10 years.  Deputy Mayor for Economic Development/Director of the Bond Bank Deron Kintner, doing financial calculations on the fly, estimated that the $3 million bond would take $10 million to pay off in 10 years.  Why a bond would have to have these terms is totally beyond reason - but that's what Kintner said.

Talley and Robinson, who voted against the proposed TIF, will introduce a proposal with alternate funding to meet the goals of the Avondale-Meadows area residents to attract a grocery store - which is absolutely critical for the residents to have available healthy, normally priced food.  They are now subject to the absurdly high prices and paucity of fresh food from convenience stores and the like.

I look forward to reviewing the new proposal once it is introduced.  And, I am glad that something is being done to provide the good folks of the Avondale-Meadows area with critical tools to lift up their quality of life.

Case for Meadows TIF

At last night's Metropolitan & Economic Development committee meeting, Councillor Christine Scales, sponsor of the proposed Meadows TIF, summarized the work that has been going on in the neighborhood and made the case for a TIF, needed to entice a grocery store that is 'waiting in the wings'.  Here are her opening comments:

The TIF for Snobs Passed the Committee, the TIF for the Needy Failed

We are truly a morally bankrupt City when our elected officials give to the rich and keep from the poor.

While I will have more to say, this pretty much sums it all up.

Most Intelligent Comments of the Night

Norman Pace, representing the Warren Township Development Association and the Marion County Alliance of Neighborhood Associations, had the most intelligent comments during last night's Metropolitan & Economic Development committee's meeting on the Mid-North TIF.  Here is the WCTY video of Pace's statement:



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.

Council Meets Tonight

The City-County Council will hold its first meeting of the year tonight.  Hold on to your wallets.

The agenda is posted here.

Two Mayoral vetoes will be taken up last : Prop 362, which would allow RebuildIndy funds to be used for Police and Fire recruit classes, and Prop 372, which are the Democrat drawn Council district maps.

Next to last is the Council funding ordinance proposed by the Republicans, which does not contain money for legal action on Council district maps - Prop 450.  Curiously, Prop 447, which was proposed by the Democrats and did contain the additional funds, is nowhere to be found.  It was listed on the public notice for the Admin & Finance meeting, but is not mentioned in the minutes as having been considered.  It also has been omitted from the list of pending proposals. 

No action is to be taken tonight on the eviscerated budgets of the County Offices.

An appeal of an MDC decision on a zoning matter in Washington Township is set for hearing by the full Council.  Unfortunately the City's webpages that list zoning petitions has been cleansed of matters prior to December, so I cannot tell you what issues are involved except to say it involves a request to allow a 90 unit apartment complex to be built on 6 acres at 8845 Township Line Road.

Two new taxes are being proposed this month - Prop 23 would increase the event admissions tax from 6 to 10%, making your visits to the IRT and other entertainment that much more expensive. Prop 24 would increase the car rental tax from 4 to 6%. [edited to add: a recent article by IndyStar reporter, Jon Murray, says that the car rental tax would to from 15 to 17%]  These revenues would go to the CIB, which had enough spare change to send a gratuitous $5 million to the Pacers just last month and will send another $5 million this month.  But, should they pass you can enjoy your family time at sporting events, concerts and plays even more, knowing you are all that stands between the Simons and a soup line.  They are being assigned to the Admin & Finance committee which next meets on January 15.  These taxes must be approved before the end of February, or the authority to raise the taxes vanishes.