Indy Tax Dollars

Way off topic

But so what?  It's my blog and I can write on any topic that suits my fancy.  It happens to be addressed pretty much to my fellow Christians.  Readers are certainly free to delete this little essay immediately if they so desire.  It is being written after the polls have closed in Indiana because it is a personal statement made without any intent to  influence the vote of any other person.

Nor is this intended to be an attack on Senator Obama.  It is, rather questions and/or comments about him and his campaign which I have not seen in other places.  Particular reference is made to his promises of HOPE and CHANGE.

I found his comment about people "clinging" to religion to be quite disturbing.  I am a practicing Christian, and you can rest assured that, for me, it requires an awful lot of practice!   Almighty God knows that I stumble and fall much more frequently than I take any kind of leap forward.  The Senator has come very close to intimating that I should give up my faith, trust and HOPE in my religion and rely on him to take care of me.  I don't think so, Senator.  I continue my HOPE in Jesus Christ.  He is the only one who can see me safely through the difficulties of this life and into the next.

The second promise is CHANGE.  He hasn't been very specific about which changes and how they are to be accomplished.  This seems to require some comment.

I believe that real CHANGE will come about when individuals like myself - and the Senator - quit making proposals for the government to enforce CHANGE upon all, and we decide to make a real effort to create the changes in our own lives which the practice of Christianity demands.  And which changes will ultimately be far more beneficial to the truly needy.

Loving my neighbor - in all its ramifications - demands that I try to help him with his needs personally.  It does not suggest that we band together and vote to force everyone to take part, thereby reducing our own "liability."  Particularly when, after all the political considerations are met, any such program is unlikely to give the neighbor the help he truly needs.  Politically mandated charity has a poor track record.

Now, if anyone wants to know how I feel about the fall election, consider this.  Congress has a poorer public approval record than President Bush.  We are now poised to elect one from that body to the presidency.  Does that raise any eyebrows?

A suggestion, Mr. Mayor

In our most recent post to this site, referring to public subsidy of professional sports facilities, we pointed out that the RCA Dome had been built in 1984 at a cost of $82 million dollars.  There is a very important fact concerning that debt which is relevant today.  We believe that the handling of this project constitutes a good example of the "smoke-and-mirrors" fiscal operations which have been used in this city for a number of years.

It always has been our thought that when any organization with monetary responsibilities changes leadership, it is a protection for both the outgoing and incoming personnel to have an audit to make sure there are no "loose ends."  The Capital Improvement Board (CIB), and its handling of the RCA Dome construction, operation and funding, should be a prime candidate for a very close examination by any new mayor.

Special taxes were enacted and/or increased for the specific purpose of paying for the construction of that building.  After nearly a quarter century of collecting those tax revenues, and as we prepare to raze a building entirely serviceable except for Colts financial demands, we are being told that almost nothing has been paid on the principal of that debt.

A few questions come to mind.  1)  What is the total amount of revenue collected from the Food and Beverage Tax over that time period?  2)  For what purpose(s) was that money actually spent?  3)  Was there misfeasance or malfeasance involved in the diversion of the funds from their intended usage?  4)  Has the unpaid portion of that debt now been assumed into the total debt for the new stadium?  5)  Is the debt for the Conseco Fieldhouse being handled any differently?  6)  Does the lease with the State of Indiana require that the principal of the Lucas Oil Stadium debt actually be paid?

Mr. Mayor, we think you owe it to yourself - and to all citizens of Indianapolis - to determine the answers to these questions.  It is information to which taxpaying citizens are entitled.

P.S.  Why aren't the media asking these questions?

The right result...

...for the wrong reasons.  We're referring to last year's mayoral election -- and this is NOT a partisan political statement.

Bart Peterson got caught in a "perfect storm" of tax problems for which he did indeed have some responsibility, but not in the area which motivated so many people in the tax protests which became so widespread.  He had nothing to do with the individual property assessments which so inflamed taxpaying citizens.

His share of the responsibility rested in the fact that he continued, and expanded on, fiscal policies  which began years earlier.  These were the policies of public subsidy of professional sports and unknown numbers of other downtown, for-profit businesses, all in the name of "economic development," and virtually all of which had an adverse impact on property tax revenues historically destined for municipal coffers.

In fact, we think it might be fair to say that the over-all policy of such subsidy began 25 years before Peterson was elected when Mayor Lugar decided to build Market Square Arena for the Pacers.  Little did he know what he was putting in motion.

In 1974 public funds were a part of the construction cost of the $21,000,000 home for professional basketball, Market Square Arena.  Next came the RCA Dome - nee the Hoosier Dome - in 1984 at a cost of $82,000,000, about a half of which was tax dollars. 1999 saw the opening of Conseco Fieldhouse, built at a cost of $183,000,000, a large part of which came from the pockets of the taxpayers.  2008 will provide the dramatic presentation of a new home for professional football - Lucas Oil Stadium - at a cost approaching $1,000,000,000, virtually ALL of which will be tax dollars. (We consider this to be a good example of a "slippery slope!")

In the same period of time, precedent was established for the investment of literally billions of dollars - public and private - in "economic development" schemes such as shopping malls, hotels, condominiums, office buildings, etc., in the downtown area.  (And let's not forget that grand "tourist attraction" - Union Station!)  Peterson followed, and enlarged upon, these precedents.  Despite this gigantic infusion of funds the tax base has remained flat.  Why?

Because public policy has turned its back on the fact that the purpose of taxation is to raise funds for the operation of government and NOT for the purpose of controlling the geographic location of economic activity within the city limits.  The property tax has been, and was intended to be, the basic source of revenue for local government.  And it is this tax base specifically which has been decimated by the use of taxpayer money to bribe and/or direct economic activity into a very small geographic area of the city.

Equality of assessment within the property tax base is a necessity if the the tax is to be applied fairly.  But prior to that ideal, it is an absolute obligation of city officials to make a true, detailed review of properties which, through these various "economic development" schemes, are paying less than their fair share, or which are not on the tax rolls at all.

We need to take a look at laws like IC 36-7-15.1.  This act not only gives the Metropolitan Development Commission (MDC) almost unlimited powers to commit tax funds to a wide variety of these projects, but includes the following language:  "IC 36-7-15.1-2e  This chapter shall be liberally construed to carry out the purposes of this section."  Giveaway projects "liberally construed" will be the death of the city!

We repeat what we've said earlier.  Equitable application of the property tax is impossible while unknown millions of dollars worth of downtown property is partially or wholly exempt from the tax by reason of official public policy.  The work of assessors, professional or not, becomes irrelevant to the degree that the mayor, the MDC and the City-County Council irresponsibly make these deals which reduce or eliminate legitimate municipal revenues, thereby increasing the load for those for whom the "freebies" are not available.

It is our belief that Mayor Peterson's failure to review these policies as the city headed further into financial problems - and particularly his decision to go ahead with the billion dollar program for a new stadium - earned his rejection at the polls.  But he had only continued on the path set by his predecessors.

Unfortunately we have as yet had no indication that the new mayor has any plans to change the city's approach, or indeed, that he has any thoughts about even taking a look at some of these things which have gotten us where we are.  Well, he hasn't been there very long.  We're still hopeful.  Not optimistic, but hopeful.

A major (colonel?) disappointment

It is still early but we see no signs that the new city administration has any intention of reviewing and/or changing public fiscal policies which we believe have made a very significant contribution to the city's monetary woes.

Pardon our cynicism, but we have not bought into the hype of the late legislative session concerning its efforts to relieve the property tax situation.  It is not coincidental that the effective date of the sales tax increase was months and years ahead of the time for property tax to decrease - permanently - maybe, making it even more important to look at all phases of the tax problems.

(Public opinion continues to be skewed by media treatment.  A recent headline said, "Sales tax increase helps cut government spending."  It covered a column out of one of our institutions of higher learning.  And led to the following thought.  A local radio talk-show host uses the word academia which he pronounces "aca-day-mia."  We really don't care about that, but couldn't help wondering whether "macadamia" might be more appropriate!)

Having at least hinted during his campaign that the money, time and effort devoted to the feel-good, pot-of-gold fantasy of an Indianapolis Super Bowl was not on his agenda, Mayor Ballard has now reversed course and is in full pursuit.  There's still been no explanation of the fact that only 3 NFL cities - in a league with 32 teams - are bidding on this alleged financial bonanza.

We have seen no public indication that he intends to make any changes in the policies of abatements, TIF districts or other subsidies of property developers which divert public funds away from legitimate municipal expenditures.  Nor has he shown any interest in trying to return property eliminated from the tax rolls to the tax base.

In fact, one specific situation exists which apparently still suffers from the desire to control, and geographically direct, economic activity.  Market Square Arena (MSA) was built 34 years ago.  Presumably the land was acquired by the city at least one year prior to construction.  Those two blocks have now been off the property tax assessment rolls for 35 years.  The building itself was demolished 7 years ago in 2001, and, of course, was never taxable. 

We had hoped that one of the first things the new mayor might do would be to give orders:  "Let the economy work.  Find a financially qualified buyer. Sell the property.  Put it back on the tax rolls!"  Seemed pretty simple to us.  Instead, efforts continue to direct the use of the property maintain priority over the simple sale, and the property remains a drain on, rather than a source of, revenue.

The situation gives us little hope that any important effort will be made to review, and possibly alter, public policies which have been in practice for so long and with such dire results to the legitimate operational funds of the municipality.

Teeny Tiny Trivia

The headline on the article was: "Daniels' ad: It's OK to differ."  That was on Friday, March 28.  The Gov's campaign ad was referring to people agreeing with or differing from his policies, positions and proposals.  We remind our readers that, on Sunday, March 23, he was quoted as saying that the president of a major, state-wide business organization had his "...head where the moon don't shine..." for remarking that the late, un-lamented session of the legislature had not been good for business.  Is this change of heart about the right to differ granted to all comers, or is the business community still excluded?  What about it, Gov?

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Speaking about what's good for business, the paper of the 28th also carried a front page headline as follows:  "The numbers are out" with a sub-head of, "82% of businesses see increases."   Reference is to new assessment figures.  The new figures may - or may not - be totally correct.  We don't pretend to know.  But we do know that there are still millions of dollars worth of real estate in the heart of the city - currently being used by for-profit corporations - which is not on the assessment rolls at all.  Considering abatements, TIF districts and municipal "investments," the question expands to equal treatment just within the business community itself.  (Can't get the paper to cover that part of the equation!)

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A front page headline on this morning's paper (3/29/08) tells us, "That 1 percent can add up."  Reference is to the onset of the sales tax increase coming next Tuesday.  We find it really strange that the new 1% can "add up" while the 1 or 2% tax we've paid to eat out all these years has been written off by the paper as too insignificant to worry about.  The article gives examples of the impact on various types of purchases, including a steak dinner at an up-scale restaurant.  A footnote - in very small type - tells us that for this dinner, as of Tuesday, the total sales tax will be 9 percent, including the "local restaurant tax."  This is a euphemism for the Food and Beverage Tax which, under the new set-up, will constitute more than 22 percent of the diner's tax bill.  The revenue from that tax, at a 1% rate, was supposedly dedicated to covering the cost of construction of the RCA Dome.  It must have been insignificant.  Two decades of income from the tax have been spent and we still owe the entire principal amount on the Dome Debt!

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Continued from above - - We've heard that the $75 million still owed on the about-to-disappear-dome has been incorporated into and is now a part of the debt for the new stadium.  Does this mean that in another 25 years we'll still owe $1 billion plus $75 million when they have the ground-breaking ceremony for the much-needed new $1.5 billion stadium?