Opinion and Taxes and Capital Improvement Board and Editorials

EDITORIAL: Council's $15M CIB raid is shortsighted

October 20, 2012

Democrats on the Indianapolis City-County Council who voted to plug a hole in the city budget by charging the Capital Improvement Board $15 million risk creating more problems than they solved.

The so-called payment-in-lieu-of-taxes, or PILOT, that they added to the CIB budget on a party line 16-13 vote is meant to provide funding for the hiring of additional police officers and firefighters, which is a laudable goal.

But there was a better alternative for coming up with the money, and the PILOT they stuck CIB with could have negative consequences for the city’s professional sports and convention venues, which CIB owns. It could also deal a blow to the city’s already shaky prospects of getting the cooperation it needs from state legislators to fund mass transit.

The money CIB now owes the city will come from its $67 million reserve fund, most of which was earmarked for debt payments and building maintenance.

The proper upkeep of CIB’s facilities is at risk if it sends the city $15 million it doesn’t have and didn’t budget for. CIB also provides financial support to Visit Indy, the agency charged with drumming up convention business. Cutting into that support will likely weaken Visit Indy’s ongoing effort to lure tourism dollars to the city.

The city’s sports and tourism industries support thousands of jobs held by the constituents of council members.

CIB only recently emerged from a financial crisis of its own by cutting expenses and tapping state-provided loans.

The state’s role in getting CIB back on sound financial footing was top of mind when Sen. Luke Kenley warned the City-County Council not to raid CIB. Kenley contends the city’s poor stewardship of CIB money will make legislators reluctant to listen when the city and other supporters of mass transit ask again in 2013 for permission to make transit funding a ballot question.

Lawmakers have, unfortunately, already turned a deaf ear to transit advocates, and there’s little to suggest they’ll be more receptive in the next session. But the council could have done better than give legislators one more excuse to balk at a transit referendum.

In finding more money for public safety, council Democrats could have chosen a path less likely to cause trouble down the road: elimination of the homestead property tax credit.

That was the course preferred by Mayor Greg Ballard and council Republicans. The credit, not to be confused with the homestead property tax deduction, saves most property owners about $20 on their tax bill.

It’s likely the vast majority of Marion County property owners would gladly pay an extra $20 to support police and fire protection.

In protecting them from that financial nick, Democrats on the council opened a can of worms with CIB that could have more significant ramifications for Marion County residents down the road.•

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To comment on this editorial, write to ibjedit@ibj.com.

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