IBJOpinion

HICKS: Muncie's status quo is high taxes, poor service

Mike Hicks
July 13, 2009
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Mike Hicks

Muncie’s current debate over the Local Option Income Tax, or LOIT, is ripe for journalistic musings.

Property-tax caps, as well as a dwindling population and commercial base, have left the city in the uncomfortable situation of cutting budgets. Since the bulk of costs are related to fire and police salaries, few options are available. The city has turned to the short length of rope the Legislature offered amid the debate on property tax caps—the LOIT.

On July 6, hundreds of folks descended upon city hall to argue for and against the new tax. I’d love to relate it in detail, but to do the event true justice requires an accomplished playwright.

It had all the parts of high drama and farce: a threatening and psychotic voice-mail orchestrated by the firefighters and sent to the mayor; a conspicuously absent city councilman (also a fireman) under multiple indictments related to election fraud; and the UAW very publicly siding with the citizens taxpayer group against the firefighter union.

And as with any good drama, a touch of farce was present in the form of a community group spinning itself as the broker of fresh ideas, when what it really was hawking was more of the same failed politics that have idled the city for too long.

What struck me most throughout the two-hour session was that so few in the hall seemed to understand Muncie’s greatest threat—the status quo.

City government can really affect two things about itself: tax rates and quality of public services. Residents and businesses choose to locate in places based upon taxes and the quality of those services.

Some people and businesses prefer low taxes and few services. Others are willing to pay higher taxes in return for better services. The past few decades have seen growth in communities that balance the two, be they high or low. While low-tax/high-quality services are rare (and attract lots of new residents), high taxes and poor public services are all too common. These places stagnate and dwindle.

Muncie, like a good many midsize cities in the Midwest, is losing population, commerce and options. Simply “getting by” is the fastest road to ruin. Cities like Muncie have to listen more closely to the faint voices of two largely forgotten groups—those who have left the city and those who have chosen other locations outside the city.

The leavers constitute one out of every 25 families since 2000, while more than half of those who are newly hired by the city’s leading employers choose somewhere else to raise families. Muncie’s status quo is high taxes and poor services. The status quo is long-term disaster.

Because of a poorly designed law, the city gets to levy a countywide LOIT. Ironically, this will only serve to exaggerate the public-service-quality rift between Muncie and the surrounding communities where dollars have been spent far more wisely.

At least the road out of town will be well-paved.

___

Hicks is director of the Center for Business and Economic Research at Ball State University. His column appears weekly. He can be reached at cber@bsu.edu.

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  1. Great article and post scripts by Mike L (Great addition to IBJ BTW). Bobby's stubborn as a mule, and doubt if he ever comes back to IU. But the love he would receive would be enormous. Hope he shows some time, but not counting on it.

  2. When the Indiana GOP was going around the State selling the Voucher bill they were promising people that the vouchers would only be for public charter schools. They lied. As usual.

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  4. Jim, your "misleading" numbers comment is spot on. This is the spin these posers are putting on it. News flash, fans: these guys lie. They are not publicly traded so no one holds them accountable for anything they say. The TV numbers are so miniscule to begin with any "increase" produces double digit "growth" numbers. It's ridiculous to think that anything these guys have done has awakened the marketplace. What have they done? Consolidate the season so they run more races on consecutive weekends? And this creates "momentum." Is that the same momentum you enjoy when you don't race between August and March? Keep in mind that you are running teams who barely make ends meet ragged over the summer to accomplish this brilliant strategy of avoiding the NFL while you run your season finale at midnight on the East Coast. But I should not obfuscate my own point: any "ratings increase" is exactly what Jim points to - the increased availability of NBC Sports in households. Look fans, I love the sport to but these posers are running it off a cliff. Miles wants to declare victory and then run for Mayor. I could go on and on but bottom line for God's sake don't believe a word they say. Note to Anthony - try doing just a little research instead of reporting what these pretenders say and then offering an "opinion" no more informed than the average fan.

  5. If he's finally planning to do the right thing and resign, why not do it before the election? Waiting until after means what - s special election at tax payer expense? Appointment (by whom?) thus robbing the voters of their chance to choose? Does he accrue some additional financial advantage to waiting, like extra pension payments? What's in it for him? That's the question that needs to be asked.

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