Tax policy is sleep-inducing. As a result, few people devote much thought to the topic, even though it can have a huge impact on the vitality of a region.
So it is far from surprising that many Hoosiers have missed this stark reality: The constitutionally mandated property tax caps so widely embraced by taxpayers have added to the financial squeeze on Indianapolis.
Income taxes—which, it’s important to note, Hoosiers pay in their county of residence, not where they work—now account for about 39 percent of Indianapolis’ general fund, and they aren’t growing quickly enough to keep pace with the increasing costs of providing basic services. Hence, as IBJ’s Kathleen McLaughlin reported in a front-page story last week, public safety and criminal justice gobbled up 92 percent of the general fund in 2013, up from 84 percent in 2011.
We applaud Mayor Greg Ballard for making this prickly problem the centerpiece of his Feb. 27 State of the City address. He and his aides recognize that the future of the city rests on drawing more high-earners who now are opting to reside in the doughnut counties to Marion County instead.
Their push isn’t about dissing the swath of the population without fat bank accounts—diversity is one of the strengths of any great city. But it is about growing Indianapolis’ population more quickly by winning over the legions who flock to the suburbs just as they’re reaching their peak earning years.
The outward migration to the suburbs happens for many reasons, but some of the big ones—such as the perception that schools are better and streets are safer—are no mystery.
Shifting those perceptions is a community-wide challenge—something Ballard and his aides recognize. They’ve spent six months reaching out to community and business leaders to increase awareness of the challenges and begin the dialogue that will lead to solutions.
Fortunately, there is reason for optimism. For one thing, millennials (those born since 1983) often embrace urban living—increasing the likelihood that Indianapolis’ already-robust downtown will draw in thousands of new residents.
Further, the new Indianapolis Public Schools superintendent, Lewis Ferebee, appears determined to put students first, setting aside the turf wars that helped cause the district’s disintegration in recent decades.
Then there’s the headway legislators are making this session on mass transit. Upgraded mass transit services are a necessity for Indianapolis to play with the big boys—the elite places that win the battle for new residents by boasting a superior quality of life.
None of this will be easy, but the most important things rarely are. Kudos to Ballard for embracing the challenge.•
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