Sunday, October 28, 2012

Ballard's Budget Veto

Posted By on Sun, Oct 28, 2012 at 4:00 AM

A few weeks ago I wrote on these pages that the City-County Council Democrats should just sign off the Mayor's introduced budget and give him full ownership of it. Instead of listening to me, they decided to do their own thing, which included talking $15 million in payments in lieu of taxes (PILOT) from the Capital Improvement Board. The end result was a mayoral veto.

The Mayor officially announced this past Friday that he was vetoing a portion of the Democrats' budget. The two biggest vetoes were the vetoing of a transfer of $32 million from the county treasurer to the county general fund. This means that funding to the county offices (Prosecutor, Auditor, Surveyor, Clerk, Sheriff, Courts, etc) will have to reduce their budgets by about 14 percent starting in January.

The second major veto was of what are known as Character 3 funds in the Council Democrats' budget, those are used for contracts and also $100,000 for redistricting. The Mayor did tell the Council that he would agree to restore the funding, provided the Democrats take out the money for redistricting.

Democrats have balked at the idea, accusing the mayor of going after public safety. They also say the mayor's move is illegal. They cite state law which says the mayor cannot veto the appropriation of an office that is created by the Indiana Constitution. The mayor's office says it is not vetoing any budget, but merely exercising another provision of state law, which allows the mayor to veto any appropriation of money or levy of a tax. And, the mayor's people add, they are merely talking about the direction of where money will be sent.

This is a very interesting game of budget chicken. Democrats don't have the votes to override a mayoral veto, they need 20. There are 16 Democrats on the Council and they would need four Republican votes. Council Minority Leader Mike McQuillan tells me his caucus won't vote to override the veto. And if someone decides to go to court, the case would have to be taken out of Marion County, since the judges are funded from the county and they would have to overhear the case.

Another interesting sidebar to all this is that there is a two-month window that the mayor and council have to negotiate. Under state law, the council and mayor cannot tinker with the budget between Nov. 1 and Jan. 1. However, they can use the window to negotiate a more effective deal. Since the Democrats can't override a veto and Mayor Ballard tells me he is perfectly happy with the budget as it is now, it will behoove Council Democrats to start moving toward the Mayor's position. Of course, had they just listened to me in the first place then none of this would have ever have happened. Oh well, there's always next budget year.

Tuesday, October 23, 2012

Don't forget your school board election

Posted By on Tue, Oct 23, 2012 at 4:00 AM


This election cycle in Indiana has pretty much been consumed by the race for the U.S. Senate. Let's face it: the President has pretty much conceded the state to Mitt Romney. And while Democrat John Gregg is a great candidate on paper, something just got lost in the translation and his campaign is sputtering in the final two weeks as opposed to Mike Pence's well-oiled machine. And with so many of us talking heads are looking for Lugar Republicans that we don't talk much about anything else. Allow me to change that as I divert your attention toward races a little closer to home, the race for school board.

There are numerous candidates running for these seats in IPS, Pike, Washington, Lawrence, Wayne, Decatur, Perry and Franklin Townships. School board races are some of the most important, but rarely get the attention they deserve. Even someone as politically astute as I am tends to focus on the bigger races, i.e. IPS. But that doesn't mean that what's going on in the Township schools isn't any less important. How many schools did IPS lose to the state under this current school board? Remember the big transportation debacle in Franklin Township schools? Or perhaps the former Wayne Township School Superintendent who got a $1 million payout after he left. These incidents might not have occurred if school boards were in place that actually put the students and taxpayers first instead of the school administration or their heads up their rear ends.

And it doesn't have to be anything controversial to get you to pay attention to these races. Schools are the lifeblood of a community. They determine home and property values, the location of new employers, and a variety of quality of life issues. And in an era of more choice, more competition and most importantly, more accountability, it is important that the citizens who are the managing partners for these school districts are the right people for the job.

It is unfortunate that school board elections are in the same year as presidential elections. I would much rather prefer that school board races be done during the same year as municipal elections. That way voters can focus solely on local matters and save the state and national issues for another time. However, it is what it is. So with that said, find out who your school board candidates are and then find out where they stand on the issues. What do they think about more choice and accountability? Do they think schools need more money or just need to do a better job of managing what they have? What is their plan to increase parental involvement? Do they think full-day kindergarten should be mandatory? What is their plan to increase post-secondary education preparedness? And here's a good one, the Indiana Department of Education is getting ready to issue letter grades for each school in Indiana. If that doesn't give you an indication of how well these school boards have been doing, I don't know what will. So make sure when you go to the voting booth and flip the ballot over and pick your school board candidates. Why should Romney, Obama, Pence, Johnson, Gregg, Boneham, Mourdock, Donnelly and Horning get all your attention?

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Monday, October 15, 2012

Council budget raids board funds

Posted By on Mon, Oct 15, 2012 at 11:00 PM


You would think that if the voters of Marion County entrusted you to be a partner with the mayor in balancing a $1 billion budget and closing a $65 million loophole, the least you could do is act in a responsible manner. Unfortunately, that message was lost on Indianapolis City-County Council Democrats.

On Monday night, and along party lines, they passed a budget balanced, in part, by taking $15 million in payments in lieu of taxes (PILOT) from the Capital Improvement Board. Just so you know PILOTS are used to collect revenue from non-property-tax-paying entities, like utilities and hospitals, which still use government services. And while the Council is acting within its authority to levy a PILOT, it did not follow state law while doing it, so this is only going to cause future problems, both legal and otherwise.

Here's why:

Under Indiana law, the same rules that apply to assessing and collecting property taxes must also apply when collecting PILOTS. That means the property subject to the PILOT must be assessed by March 1 of the year prior to collection. So if the Council was going to collect a PILOT next year, they should have assessed the property by March 1 of this year. That didn't happen; the Marion County Assessor completed the assessment earlier this month.

Second, anytime property is assessed, notice must be sent to the owner offering the opportunity for appeal. That the CIB not receive proper notice is not the only problem. A legal question remains unsettled as to who is responsible for Lucas Oil Stadium. Back in 2005-06, there were issues as to whether there were enough funds to build the Stadium. To make it happen, the Daniels administration sold the idea of a food and beverage tax to the doughnut counties. In exchange, the state took over the property, even though the CIB manages it. So if the state is the owner and the CIB, the property manager, why is the CIB getting stuck with the bill?

And speaking of the state, we now enter the most troubling part of the entire deal. To get the $15 million, the Council wants the CIB to dip into its cash reserves. The problem with that is those reserves are used for construction, and to pay back future loans which are coming due. By attempting to take that money, not only is the council putting the CIB back on the road to bankruptcy, it is really ticking off Indiana lawmakers that had to bail the agency out back in 2008. It is so bad that Sen. Luke Kenley (a Noblesville Republican and state budget God) has said if the city takes money from the CIB, they can pretty much forget about mass transit or any other financial help for projects. Because the whole reason for state assistance was to get the CIB out of financial trouble.

But what did Council Democrats do at the end of the day? They did something that is illegal and will do nothing but create ill will on the other end of Market Street. And it still, unlike the Mayor's budget plan, does not help address the long-term needs of the city of Indianapolis. And it sets a horrible precedent because now when the city runs short, the council can ignore state law and levy a PILOT against any not-for-profit whenever it feels like, regardless of the impact on the charity. And to add even more insult to injury, the Council is taking the entire $15 million for the city budget, when if they really wanted to be fair, they would only take the city portion of the PILOT and then distribute the rest to other local governments like schools. They complain when the mayor used TIF (tax increment finance) dollars for the city and didn't distribute it. Way to go guys. With partners like these, who needs enemies?

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Monday, October 8, 2012

Give Ballard His Budget

Posted By on Mon, Oct 8, 2012 at 4:00 AM


We are in the home stretch of budget talks and hearings down at the Indianapolis City-County Building. Since mid-August Councilors have been pouring through the document, trying to figure out alternatives to Mayor Greg Ballard's proposal to close a $65 million budget gap due to rising city expenditures and declining income tax revenue.

The Mayor has proposed closing the gap by putting on hold scheduled raises to the police and fire department, eliminating the homestead property tax credit, taking $37 million from rainy day fund balances as well as using $10 million in TIF funds.

Some Council Democrats want to levy a PILOT (payment in lieu of taxes) against the Capital Improvement Board to try and close that gap. And some Republicans are looking at ways other than eliminating the homestead property tax credit to close the budget hole. Those two ideas feature several problems.

First, to levy a PILOT against the CIB the property the CIB manages would have to be assessed, which has not been done because it is government property. Second, the CIB, while it has $65 million in cash reserves, has a lot of debt to pay off, including a loan to the State of Indiana. Taking from it only puts the organization back on a path to bankruptcy, which is where it was several years ago when the Legislature came along to bail it out in the first place. Most importantly, this would be just a one-time fix to a long-term problem, like dipping into your savings account to pay your monthly bills.

As far as not repealing the elimination of the homestead credit, it's important to remember why it was created in the first place. During the days of skyrocketing property taxes, the credit was necessary. Property tax caps alleviated that problem. The state eliminated the credit a few years ago. Also, by eliminating the tax credit, which actually costs about three times as much to administer as it brings in ($13.5 million to provide $4.5 million in relief) , not only will more money flow to the city of Indianapolis, but actually numerous municipalities and other units of local government which are strapped for cash. Schools alone would get nearly $4 million.

Perhaps the most important reason the City-County Council should give the Mayor his budget would be to give him complete ownership of the city's financial situation. Not that I am a big fan of abdicating responsibility, but sometimes, from a political perspective, punting is the best thing to do. If the whole budget plan falls apart, the Mayor's office can't blame the Council for not passing his budget plan. And if it is a success, the Council can take some credit. There's nothing like a financial shortfall to bring out the political chess master in everyone. In addition, it's important to note that as the city tries to go to the Legislature and push for mass transit, it would look better if Indianapolis and Marion County are seen as making tough choices as opposed to kicking the can down the road.

So with less than a week to go, the Council should go ahead and give the Mayor his budget. It will make life easier for everyone, today and definitely tomorrow.

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Tuesday, October 2, 2012

The tiff over TIFs reflects deeper issue

Posted By on Tue, Oct 2, 2012 at 4:00 AM


So What is the tiff over TIFs Really About?

When Center Township Constable Tony Duncan called City-County Councilor VopOsili the "n-word" earlier this week at a Center Township Democrat Club meeting, you knew trouble was in paradise.

Duncan's comment — "That nigga doesn't know what he's doing down there" —referenced Osili's support of expanding the downtown Tax Increment Finance (TIF) District to include Mass Ave and 16 Tech. The proposal passed out of committee on Friday and was up for a full vote Monday after a month's long delay.

You would think the battle over the TIF would have featured Republican Mayor Greg Ballard on one side and Council Democrats on the other. Not this time, this fight has been Democrat versus Democrat, or to be more specific Old Guard versus Young Turks.

Former State Rep. Bill Crawford, Auditor Billie Breaux and Center Township Constable Tony Duncan lead one side. On the other side: Council President Maggie Lewis, State Senator Greg Taylor and VopOsili. There are various other players, some major like the ministers and neighborhood and business groups that have been supporting the TIF expansion. And then there are the peripheral players like Council Vice-President Brian Mahern, who was all but politically neutered at Friday's committee hearing when after the vote he began to read a statement and his microphone was turned off and the Channel 16 screen went to black. To add insult to injury, the Council passed the measure Monday night 25-2.

While this all makes for good theater, it reveals a deeper divide in the local Democratic Party. The TIF district fight is symptomatic of something much deeper, much like a couple arguing over too much sugar in the coffee when they are really fighting about something else. That same dynamic exists here.

The Old Guard, which is more aligned with County Chairman Ed Treacy and the Mahern clan, has taken a more combative tone with the Mayor, wanting to deny him victories. The Young Turks have decided that cooperation and collaboration work better in moving the city forward, especially in neighborhoods that are in the most need of services, public safety, jobs and economic development.

Even long-time Democrat stalwart and political heavyweight Lacy Johnson paid the Young Turk crowd a compliment recently. That was enough to throw anyone for a loop.

This internal battle is for the heart and soul of the Marion County Democratic Party and what role it will play in local politics, not only for the next few years but likely for the next 10-15. It is even getting to the point where a number of Democrats want Treacy to remain Chairman when his term ends next year so that a civil war doesn't erupt. Other Democrats are clamoring for 7th District Congressman AndrĊ½ Carson to step up and take a more active role in internal party affairs.

Who will win? As one Young Turk sympathizer told me the other day: "Time is on our side, because eventually death is going to catch up with those old guys."

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