Fort Wayne has a $6 million budget deficit and a $65 million backlog of unfunded street repairs that dwindling reserve funds can no longer cover. Too many years of short-sighted planning and a “don’t just stand there, spend something” mentality led to this mess. A bi-partisan fiscal policy group was even created to fix it.
City officials would have us believe that the loss of revenue due to the property tax caps – $53 million lost since 2009 – is largely responsible for the current condition of the budget. However, the impact of the tax caps was known and was predictable for the past 5 years. If you know that your income is going down, doesn’t it make sense to cut your spending as a first step to solvency?
Not according to the policy group. They have recommended a smorgasbord of new taxes to fill in the budget gaps. The adoption of two new local option income taxes (LOIT), each at a .25 percent rate is at the top of the list. These new income taxes would cost the average tax payer an additional $120 per year and would raise nearly $14 million in annual revenue for the city.
The financial policy group also recommends a municipal cumulative capital development fund implemented that would raise an additional $1 million through a property tax. They would also like to tap into the banked levy that adds $1 million, and utilize $1 million in interest from the $75 million legacy fund over the next 5 years to address street repairs backlog.
Other governmental bodies are not in agreement with raising taxes. Allen County officials have rightly pointed out that the LOIT’s would impact nearly 70,000 residents in unincorporated areas. These residents do not have access to all of the city services and they do not have the ability to vote for city representatives. This is a clear case of taxation without representation.
To soften the negative reaction to higher taxes, the policy group proposed a $5 million reduction in city operating expenses. The first recommendation is to add a fire protection fee to the City Utilities bill that would free up $3.5 million in the budget. The policy group has also recommended changing the healthcare policy for city employees and revamping how sick time is accrued.
Unfortunately, these recommendations do not lead to a true reduction in spending. The fire protection fee adds about $2.40 per month to our City Utility bill. This is technically a “tax increase” in the form of a new fee. Whether or not the unions will allow employee benefits to be reduced is far from known at this time as well.
If benefits are really being looked at as a source of savings, then the policy group did not dig deep enough. During the last election the salaries of Fort Wayne officials were called in to question. Our Mayor, Chief Operator, and City Controller are all paid more than Indiana State Governor Mike Pence who makes $111,687.94 per year. There is a case to be made that salaries of top officials have climbed past appropriate levels given the financial state of the city.
It’s important to remember that the property tax caps were enacted by Indiana voters to reduce the size and spending of local government. Cities and counties that responded to the call for smaller government across the state are in strong financial shape. Cities like Fort Wayne, whose administration lacked even the most basic of fiscal discipline, are now in need of new revenues to maintain their poor spending practices.
Citizens must demand that their local government act as good stewards of tax dollars and pass balanced budgets. Families across the state have made difficult decisions in the face of a down economy and the government should be expected to do the same.
Until the city learns how not to spend more than it takes in, handing over more tax dollars to the city administration to solve the budget problem is equivalent to giving an alcoholic more booze to sober him up.
Ryan Ripley is a 33 year old husband and father of two from Fort Wayne, Indiana. He graduated from Indiana Wesleyan University with a BS in Business Administration. Prior to joining the Libertarian Party Ryan ran for a seat on the Marshall County Council in 2010 and on the Plymouth Common Council in 2011 as a Democrat. During that time he also served as the acting Chairman of the Marshall County Democratic Party. Ryan can be found on Twitter (@ryanripley) and can also be reached at ryan@ryanripley.com
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