"The untold story

By now we all know the official story of why Bart Peterson lost his bid for a third term as mayor of Indianapolis. Taxes! Increases in local property and income taxes cooked Peterson’s goose. “He should cut spending,” argued the people with “Bart Lies” signs in their front yards.

So Greg Ballard was elected to take Bart Peterson’s place. A lot of new faces were elected to the City-County Council, too. Now it’s their turn to wrestle with the city’s balance sheet, to cut the fat that taxpayers insist is lurking there.

But there was another story behind the uproar over local taxes. Somehow we all seemed to miss it. That story is called the war in Iraq.

City governments have traditionally drawn on funding from a variety of sources to make ends meet. One of the biggest sources of urban support has been the federal government, which has the power to make money available to cities in the form of block grants, as well as through any number of other domestic programs and acts. The Bush Administration took office with a penchant for cutting these programs, so it’s difficult to draw dollar-for-dollar correlations between cuts to domestic programs designed to help American cities and towns and spending in Iraq. But, after almost five years and war costs estimated at anywhere from $500 billion to over a trillion dollars, it seems incredible to deny that the cost of war isn’t having a direct impact on the fiscal health of cities like Indianapolis.

The National Priorities Project (nationalpriorities.org) is a nonprofit organization that has figured out how to calculate what states and cities are contributing to the war effort in taxes. So far, NPP calculates Indiana taxpayers have spent $6,944,800,000 on the war. Here in Indianapolis, we have chipped in $860,400,000.

Imagine what a fraction of this amount might have gotten us in terms of cops on the beat, fire equipment, teachers or public transit.

“These are funds that we aren’t going to receive,” said Colorado’s House Majority Leader Alice Madden during a debate last spring in that state’s Legislature. “Low Energy Assistance Program, $9.8 million, gone. Head Start, $3.7 million, gone. Child Care and Development Block Grant, $13.5 million. Special Ed, $8.8 million … The more money that’s spent over there means our citizens in this state aren’t going to get services they need.”

President Bush’s proposed 2008 budget includes just a 1 percent increase in nonmilitary and homeland security programs. The proposal cuts Community Development Block Grants across the country by $735 million, education by $1.5 billion, the Individuals with Disabilities Education Act by $291 million, Head Start by $107 million. Bush proposes a $1.2 billion cut to Social Service Block Grants and a $400 million cut to Low Income Heating and Energy Assistance.

Oh, and he also promises a balanced budget by 2012.

Meanwhile, according to Nobel Prize-winning economist Joseph Stiglitz and Harvard public finance lecturer Linda J. Blimes, the war is costing $280 million a day based on Iraq war supplementary spending bills passed by Congress. This figure doesn’t begin to tally the hidden and long-term costs of treating the wounded and disabled and paying off the interest and other costs associated with the borrowing that’s been done to finance the war.

But then we really don’t know how much money has been spent in Iraq — or is going to be spent. A Congressional Research Service report published in November indicates the Department of Defense is not reporting all available war funds. What’s more, a year ago the DOD changed its requirements for supplemental bills, allowing them to apply to what the CRS report calls “the longer war on terror.” And then, a couple of weeks ago, President Bush and Iraqi officials announced an agreement to negotiate a “long-term” occupation of Iraq that would involve keeping approximately 50,000 troops there indefinitely.

“We’re masters at doing a lot with a little, but the little keeps getting littler and littler,” Bart Peterson told a reporter from the Detroit Free Press at a convention of the National League of Cities in late November. The convention might have been a celebration for Peterson, who was concluding his tenure as the league’s president. If you’d asked him last spring, he could have been excused for predicting that when the convention rolled around, he’d be enjoying the afterglow of re-election as mayor of Indianapolis. Instead, he was a man without a job.

“Everyone wants to cut taxes,” he said. But, he added, “If you added just $10 billion a year to federal support for cities, it would make an enormous difference.”

Like, maybe, not having to raise the local income tax to pay for 100 new cops. Or like having more money to repair streets and sidewalks without having to resort to the property tax to cover those costs.

But these are Greg Ballard’s problems now.