Wednesday, October 31, 2007

Same Old Song and Dance

The Indianapolis Star has completed their endorsements for the 2007 Mayoral and City-County-Council races. Sadly, there are no surprises in their selections. Overall, the theme is one of maintaining the status quo through the re-election of 21 out of 29 incumbents in the CCC races. They do propose a shift from a Democrat controlled council to one under Republican control, but fail to endorse any candidate that is not representing one of the two traditional parties. The biggest insult in their recommendations is the endorsement of Ron Gibson over other more deserving, more morally sound and more fiscally responsible candidates.

One such candidate is Libertarian Tim Maguire. You can read his position on the issues of importance to the citizen taxpayers of Marion Co at his website:

The fact that the Star did not even list the names of the other candidates running for the At-Large seats, as they did for the district candidates, is an affront to the voters of Marion Co. It's as if the Star was saying, "These are the candidates we endorse and you don't even need to consider any others." The unfortunate thing is that there are enough uninformed voters who rely on these type of endorsements to make them relevant.

I will not call on a total boycott of the Star's endorsed candidates, that would serve no useful purpose as some of the candidates are indeed worthy of election. However, I would urge everyone to think for themselves and not follow the herd. Vote your conscience and regardless of the outcome you'll be able to say, "I did what I thought was right."

Saturday, October 27, 2007

A Call to Duty

THESE are the times that try men's souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands it now, deserves the love and thanks of man and woman. Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly: it is dearness only that gives every thing its value. Heaven knows how to put a proper price upon its goods; and it would be strange indeed if so celestial an article as FREEDOM should not be highly rated. Britain, with an army to enforce her tyranny, has declared that she has a right (not only to TAX) but "to BIND us in ALL CASES WHATSOEVER," and if being bound in that manner, is not slavery, then is there not such a thing as slavery upon earth. Even the expression is impious; for so unlimited a power can belong only to God. - Thomas Paine, "The American Crisis", December 23, 1776

The winter of 1776 was severe. Washington's ragged Continental Army was encamped at Valley Forge PA. The colonies had been at war with Britain since April of 1774. Apart from a few bright moments in New England, the war was going badly. Washington had been defeated in every battle he fought. The Continental Congress had been forced to abandon Philadelphia. The Army was freezing and starving. Desertions were high and men whose enlistments were expiring were reluctant to re-enlist. Into this time of crisis came the words of Thomas Paine.

Paine's words ring as true today as they did over 200 years ago. Today there was another rally on the circle. The turnout was but a fraction of the crowd that was there last summer for Black Sunday. Many people thought that the tax crisis was over last summer when Governor Daniels "froze" the property taxes at the 2006 rates pending a re-assessment. This week the Governor revealed his property tax plan. Again many hailed this as the answer to our problems.

Sadly, the crisis remains. The Governor's tax plan does nothing to alleviate the immediate problem. The Marion Co. township assessors have almost without exception said the reassessment will make no difference. Thus, when the reconciliation bills arrive in April those people whose taxes increased beyond their means to pay will still face the loss of their homes. To compound the problem, the first installment of the 2008 bill will be due in May. Of course the Governor's plan relies upon the legislature to enact it, not a foregone conclusion.

I am worried that too many of us resemble those "sunshine patriots" to which Paine referred. Will we show up at the polls this November? Or, will we assume that someone else will make the correct decision for us? We must shoulder our responsibilities just as the soldiers of the Continental Army shouldered their muskets.

Friday, October 26, 2007

March of the Strawmen

How much did Marion Co. lose from the elimination of the Business Inventory Tax?

The loss of the revenues generated by the business inventory tax has been cited as one of the contributing factors in the need to raise property tax rates. How much did we actually lose? I called the Marion Co. Treasurer's Office on Oct. 25 2007, and spoke to someone who identified herself as Sue who told me that she had been instructed to tell inquirers that in 2006 $48 million had been collected. Attempts by myself and others to confirm this figure on Oct. 26, 2007 were unsuccessful. However, the following exert from the Metropolitan Development Committee meeting of Aug. 13th suggests that this may indeed be a reasonable estimate. $48 million represents about 3.5% of the total levy for 2006. (see following post for amount of 2006 levy).

DATE: August 13, 2007
CALLED TO ORDER: 5:30 p.m.
ADJOURNED: 7:05 p.m.
Attending Members Absent Members
Dane Mahern, Chairman
Rozelle Boyd
Ron Gibson
Scott Keller
Lance Langsford
Robert Lutz
Angela Mansfield
Jackie Nytes
Marilyn Pfisterer

Robert Clifford, City Controller made opening remarks and gave an overview of the proposed 2008 budget. Some key points are as follows:
Goals for 2008 budget are to reduce property taxes, prioritize spending for public safety in crime prevention and initiatives, fund pre-1977 police and fire pensions, minimize cash flow problems caused by re-assessment, etc.
Challenges in the budget are last year’s shortfalls, spending down fund balances in 2007, and requests exceeding revenues (i.e. Information Service Agency (ISA) request for a $12 million increase), state mandates, etc.
Property tax levy reductions in the amount of $50.4 million: County Cumulative Fund reduced by $600,000, Child Services Debt budget is relatively flat in 2008 and levy can be decreased, Tax Increment Finances (TIFs) are healthy and do not need to collect all the money, seven million dollar reduction in the Redevelopment Debt, etc.

Metropolitan Development Committee
August 13, 2007
Page 4

Property tax levy is frozen due to the increase in County Option Income Tax (COIT) being passed.
The City property tax levy has actually declined over the past eight years and the Council has already made improvements with property tax dollars with the consolidation of Warren and Washington Township Fire Departments.
The City’s portion of the property tax rate is less than 25% and will continue to decrease.
The County represents nine percent of the total levy in the county, and that nine percent keeps people in jail, sends out warrants, and runs the court and the criminal justice system.
2008 challenges: $20 million of the $35 million in COIT notes have to be paid back in 2008, labor contracts, fuel, rent for city and county increase.
There is no borrowing currently required to fund the 2008 budget.
The timing of property tax collection for 2007 and 2008 will have an effect on the cash flow for the city and county budgets (approximately $52 million).
Councillor Mansfield asked for clarification on why there is a cash flow crisis. Mr. Clifford said the Governor has ordered that 2007 property taxes be paid at the 2006 level and in 2006 there was $132 million less in taxes levied The percentage of the total levies has decreased two percent in 2007; therefore, two percent of the $132 million will be lost revenue. He said the second problem is businesses do not pay inventory tax, which is five or six percent of the county levy that is lost.
Mmoja Ajabu, Minister of Social Concerns, said he is concerned with the way the city determines the budget. He said they decide how much money they would like to spend, then come to the tax payers for the money. Minister Ajabu said the city should look at the revenue coming-in and then decide how money is spent. Bart Brown, Council’s Chief Financial Officer, said the Controller looks at the fixed revenue available before looking at the budget request. Mr. Clifford said the rules for property tax assessment are done by the state, and the city can only do what the state provides them by law.

So 3.5 -6 % loss of revenue justifies massive increases in the property tax rates? I don't think so.

Lies, Damn Lies and Faulty Statistics

Mark Twain once wrote that there were three types of lies, "Lies, Damn Lies and Statistics". Statistics and numbers in themselves do not lie, the lie exists in the manner in which they are used as the following case illustrates.

By now everyone in Marion Co should have received their Fall property tax bill. Our esteemed County Treasurer, Mike Rodman, included a nice little chart of how these funds were being spent. For those of you who do not have it at hand here's a copy to refresh your memory.

According to the pie chart the % change over the 2006 levy was 100%. To me, this would mean that the levy total doubled from 2006 to 2007.

Well, it didn't, as the following table demonstrates. (click on chart to see larger image)

As you can see the actual increase in the levy is approximately 9.7 % So how did the Treasurer's office arrive at a result of 100% for the change over the 2006 levies?

They used the total Difference to calculate the change. For example let's look at the State Welfare line. The Treasurer's office calculated it as $45,732,251 divided by the total difference,
$132,382,162 multiplied by 100% to arrive at a value of 34.546% (based on the numbers included in the mailing this would be 33.567%). However, if we divide the individual difference amount by the welfare 2007 levy (which is the only way this should have been done) we get a value of 75.09% for the increase in the welfare levy. Please note if you were to try to add individual values given in the Actual % Change column together as they did with the "% Change Over 2006 Levies", you would get a result that is greater than 100%. You just can't do this, it's not mathematically sound.

Another thing to note is that if we were to ponder what the percentage the additional $45,732,251 levied for welfare is of the total 2007 levy we would find that it is 3.06 %. Not a huge increase considering the size of the levy, and yet the cost of state welfare being pushed back onto Marion Co. was cited as one reason for the need to drastically raise the tax rate.

One has to wonder whether this was a deliberate attempt to obfuscate the true numbers or just a matter of someone being mathematically challenged. Either way it does not engender a large degree of confidence in the Treasurer's office.

What a Difference a Year Makes

From Greg Bowes 2006 election site:

The Bowes Plan for Better Assessment Practices in Marion County

The Marion County Assessor is responsible for overseeing the assessment work of the county’s nine township assessors and collecting their data for transmission to the State Department of Local Government Finance (DLGF). In addition, the County Assessor processes inheritance tax returns and determines whether taxpayers are entitled to the exemptions they seek. Finally, any time a taxpayer wishes to appeal a decision made by the Township Assessor, the appeal goes through the County Assessor’s Office and its Property Tax Assessment Board of Appeals.
The Marion County Assessor is also one of three County Commissioners, along with the Marion County Auditor and the Marion County Treasurer. The County Commissioners supervise the property owned by the county and make appointments to nine boards.
The main goal of the County Assessor should be to ensure the accuracy of property tax assessments. Our property taxes are imposed by the City-County Council, the school board, and several other taxing authorities. Those taxing authorities determine how much is needed to pay for essential government services. Each property owner pays a fair share based on the value of the property he or she owns. The County Assessor’s job is to make certain the tax burden is shared equally and fairly.

Anyone here think Mr. Bowes has succeeded at his job as outlined in the last sentence?