HOWEY: Tax caps might force government mergers

August 20, 2011

Brian HoweyIt was just last November that Hoosier citizens cast 1.1 million votes for property tax caps and 438,687 votes against. Since then, property tax bills have been cut $655 million.

We’re beginning to see arduous clamps on local government spending, some of it cutting legitimate fat, but others resulting in daunting reductions in services.

Just this month, the Louisville Courier-Journal reported the Clark County Sheriff’s Department faces cutting $1.2 million from a $9.5 million annual budget. That could mean inmate prisoner furloughs.

In Delaware County, commissioners sent a questionnaire to employees on the topic of a four-day work week as government revenue dropped $25.4 million. Allen County is grappling with budget cuts of 7.5 percent. St. Joseph County faces a $35.6 million cut in revenue. Madison County lost $29 million. Lake County is expected to lose $103 million.

Muncie has closed fire stations and proposed clearing snow only during Monday through Friday business hours and turning off 85 percent of its street lamps.

Brown County Highway Superintendent Claude “Smokey” Presseau has a $500,000 annual paving budget, enough to resurface five miles of roads. But he has 46.5 miles of roads rated fair to poor in the Pavement Surface Evaluation and Rating Standard.

The irony here is that, for the past several years, Gov. Mitch Daniels, who made the tax caps one of his highest priorities, pointed to beleaguered Michigan as a state where counties are grinding up paved roads into gravel. Indiana county decision makers may face the same tough choices.

Indianapolis is looking at a $3 million cut in Mayor Greg Ballard’s proposed $570 million general fund and is seeking $20 million in department and agency cuts.

Terre Haute Mayor Duke Bennett, a Republican, told Howey Politics Indiana that his city has lost $6.9 million in revenue out of a 2008 budget of $25 million.

“We’ve cut all the fat,” Bennett said. “Now it’s the people thing.”

James Borgmann, director of Muncie Downtown Development Partnership, told the Indianapolis Business Journal, “There are some positive things in budget tightening and looking at what you really need and some things, but there comes a point when you’re getting pretty close to cutting major services.”

Talk to just about any mayor and you hear similar stories across the state. The fear is that municipalities will be forced to cut “muscle” in the coming years. Bennett observes that while 70 percent of the voters favored the tax caps, “Many of them still don’t get it. They have to understand there will now be cuts in services.”

In Daniels’ mind, the property tax caps were put into place to get local governments to consolidate “redundant” local units.

“I think where there was overspending, [the tax caps are] bringing discipline,” Daniels said last April. “In places where spending is more reasonable, there’s still more opportunity for reform at the local level.”

That is only slowly beginning to take shape. Zionsville merged with Eagle Township. There are government consolidation movements afoot in Evansville and Vanderburgh County; among Brownsburg, Brown and Lincoln townships; between Kokomo and Howard County (that would reduce 12 townships down to five); and between the Turkey Run and Rockville school corporations. There have been rumblings of other merger talks between Muncie and Delaware County.

Another between Greenwood and White River Township was tabled, contributing to the Republican primary defeat of Greenwood Mayor Charlie Henderson.

And therein lies the flaw in the caps. Citizens are only now waking up to the notion that vital services will be cut unless dramatic changes are made.

The various local fiefdoms and turf wars are going to make consolidation difficult. The local Tea Party tribes have taken a pass on pressing for corresponding government reforms.

Taxed enough already? In Indiana, the question will likely be, can I get some service?•

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Howey is a third-generation Hoosier journalist who publishes Howey Politics Indiana. Send comments on this column to ibjedit@ibj.com.

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