Indy Tax Dollars

Almost untitled again

Readers will remember a recent post we called "Untitled" because we chose not to use profanity.  Yesterday's front page headline - "City's sports venues in the red" - has us sputtering again.

The Capital Improvement Board (CIB) compares to a group of school children - primary grades - who spend all their money in a candy shop then are bewildered that they don't have money for the bus ride home.  (Or maybe it was planned.  "The building is there.  We can't just let it stand idle.")

How is it possible that educated adult men and women did not consider the fact that a much larger building, with a much more sophisticated type of operation, was going to cost more to run.  And do they really think the taxpayer ought to be on the hook because the basketball team has a lousy season?

The following is a partial repeat of a post we made two years ago on how to handle costs..

We suggest a variation on the TIF approach, which we would call RIF, that is "Revenue Increment Financing."  Here's how it would work.

Some time ago advocates of the stadium/convention center project told us the deal would bring into the city an additional (incremental?) $2 billion over a 10-year period.  That's $200 million per year of new money.

We believe it is a fair assumption that the original impact of at least 75% of that money would be at the level of downtown service/retail, for-profit commercial businesses in a definable area focused on the stadium. That area would be determined to be an RIF district.

We already know how to set up such districts for sales and income taxes.  If the CIB could get its act together to provide accurate future expenditure estimates, it should be a simple matter to determine a share of these expenses to charge to each business in the specified district.  Per our assumption above, a base amount of $150 million, the cost to each of these businesses surely would be a modest amount, particularly when considering that every other business and individual in the city is already subsidizing them.

After all, under TIF, the entire property tax increase is diverted from municipal funds.

There is one caveat.  Our proposal assumes that the $2 billion estimate of revenues is somewhere near the truth.

The beat goes on - and gets worse

Just about a month ago, we wrote on the continuing clamor for "mass transportation" - meaning quick service for our Hamilton County friends to get downtown.  Now we have the introduction of an outrageous piece of legislation in the General Assembly.

We refer to Senate Bill 497 which would allow the establishment of "Regional Transportation Districts"  (RTDs).  While advocates of slimming down government in the state are hard at work, this would be a new layer at county or multi-county level. 

The RTD would be operated by an appointed board which would have the power to raise funds from: property taxes from an "allocation area" within the district; a special property tax; a food and beverage tax; a "green tax" of $10 per automobile registration; and a county economic development income tax. Plus, naturally, any free federal funds lying around.  This is NOT an "either / or" list of options. 

For the unwary, we would point out that taxes from an "allocation area" would constitute a Tax Increment Financing (TIF) scheme for residential property.  A decision would be made, presumably by this non-elected board, that residents would benefit from the presence of rapid transit, thereby increasing the value of their homes.  We find no limitation of the size of the "allocation area" and one might assume that if you live closer to the train station than to Monument Circle, you are a beneficiary and your residence would then be reassessed.  

Need we remind our readers what happens to tax "caps" set as a percentage of assessments?

Another little sweetener is the provision that any amount collected from their County Economic Development Income Tax "...may not be considered by the department of local government finance in determining the county's maximum permissible property tax levy under IC 6-1.1-18.5." 

Since retirement we've gotten somewhat out of touch, and, quite frankly, we're not aware of what effect revenues from that income tax have on property tax limitations.  But we do feel fairly certain that excluding those revenues from any computation will not bode well for the taxpayer - of either tax.

And just as an aside, do we really want to write into law a completely indeterminate term such as a "green tax?"  If we must use a color, how about "blue" as representing the feelings of taxpayers?

No title

We're using this heading because we can't think of words (at least those usable in public discourse) to express our feelings about the front page article in this morning's paper and its accompanying headline.

"WHAT WE WANT"

Our six children are all now grown with families of their own. But we haven't forgotten the lengthy discussions with them as youngsters where we tried to impress upon them the difference between "wants" and "needs."  And frankly, we have to wonder about the intellectual age of the person(s)  responsible for this list.

"We want $30 million" for new bricks and other upgrades of Monument Circle.

"We want $50 million" for the "Cultural Trail" and "Bike Ways."

"We want $7 million" for IndyGo - not for buses but to "rehab" headquarters, including a quarter million dollars for an "employee workout center."

"We want $79 million" for sewer system overhaul - a legitimate need but one which has been set aside for decades while we lavished hundreds of millions of local tax dollars on sports palaces.

It's about as practical as a letter to Santa Claus from a six-year old.  (Unfortunately, a lot of adults do seem to think Santa resides in Washington!)

If this is anywhere near what the ultimate total list of "wants" will be, we are looking squarely at a proposed "stimulus" which will be nothing but a $1,000,000,000,000 pork barrel.  (Yes, that's a trillion!)

If this the best we can do toward solving the national financial crisis, may God help us.  We're certainly not going to be helping ourselves, or our country.

A riddle...

...for which we do not have an answer.

Why is a necessary public service, available to all citizens, expected to be financially self-sufficient while the taxpayer erects and maintains a billion dollar property for the benefit of a private, already profitable, entertainment business?

This version of the riddle was generated by the appearance of stories in the local daily and weekly business print media - both dated January 5.

The daily paper gives us the story of people being unable to get to their place of employment due to further decreases in service - along with increasing fares - by IndyGo.  That, IndyGo, is the organization providing what passes for public transportation in Indianapolis.

The weekly paper carries the news of the extremely successful marketing job being presented by the football team which inhabits our new stadium.  The headline says the team has been lifted "...into the NFL elite."  We congratulate the team on its efforts.  That's how a private business is supposed to operate.

But surely the question arises as to why the team's owners cannot apply equal effort in providing the very basic funds any other business would be expected to supply for itself.

Why are millions and millions of dollars generated by the team - in and from that billion dollar property - not offsetting tax dollars instead of being pure gravy atop the entree forcibly taken from taxpayers?

Particularly under current economic conditions we urge, once again, that the outrageously philanthropic contract between the city and the football team be re-visited. 

Do we really want to tell an individual to ride a bike, or walk to work - or give up a job - because we're spending the tax dollars on golden chariots for some millionaires?