Honesty Is Appreciated - Tax Increase On The Way
A local newspaper had a five question interview with outgoing city controller Pat Roller. The questions dealt with the looming budget crisis and what this means to taxpayers:
2) How will those changes affect future city budgets?
The 2009 budget came in balanced, which was great, and I always appreciate all the effort of the city employees. …
But the 1 percent (circuit) breaker does kick in in 2010, and that’s going to be a $10 million hit, a shortfall in the revenue. And that’s going to happen every year on a go-forward basis.
So there will need to be some changes, and those changes will include dramatic cuts in some fashion, whether it be in our parks or public works or public safety, which is 90 percent of the budget, or whether council chooses to utilize some of the tools the state has given to local government, that’s a decision that’s going to need to be made.
3) What will be the effect on citizens?
Citizens are going to see one of two things: Either dramatic service cuts or an increase in some kind of tax.
There’s going to probably need to be a lot of work done at the council level, the decision makers, to see what citizens want and what is the best decision for our community.
I don’t think she could be any more clear. There is either going to be cuts or a massive tax increase. Which one do you think the Henry administration is angling for? Surely our current city council won’t just kick this problem down the road one more year instead of beginning to deal with it now?
If the council does not make significant cuts to the budget starting this year there will not be enough political will to cut the necessary services next year and you will see a doubling of your income tax…
The Harrison Situation Is Dire
Jason Freier of Hardball Capital is beginning to back away from his original plans for The Harrison:
Jason Freier, Hardball Capital chief executive officer, said Thursday his development group remains “totally committed” to The Harrison project but that changes might be needed for it to happen.
The developers are looking at redesigning the building to have larger, but fewer, condominiums.
Construction has been stalled for months at The Harrison as the developers have failed to sell enough condominiums to persuade banks to lend the necessary money for the project. Freier said the current credit crunch dominating news coverage has been affecting real estate developers for almost a year.“The issue is financing and timing,” he said. “There are some banks, their doors are closed, quite frankly.”
Freier said the market is so tough that he would be willing to consider taking a loan if a bank asked that the developer scale back The Harrison. He said if a bank gave the OK on a smaller project, he would discuss the possibility with city officials. While it would be less investment, he said it would allow the developers to get started on construction.
It doesn’t matter what excuse Freier gives as the truth is this project is nearly dead and something needs to be done to salvage it. We’re at a tipping point for this project and a failure to recognize that could have drastic consequences. City Council President Tom Didier cannot wait until November to address this issue - he needs to call Barry Real Estate to the table now and ask them what can be done to move forward. It wouldn’t hurt if Mayor Henry would convene a roundtable with local banks and Barry Real Estate to try and negotiate some sort of financing that keeps everything on track.
Any more delay could put the entire project in serious jeopardy. The hotel developer’s contract is tied to the rest of the project and the vast majority of financing for the project comes from the hotel - if they walk the project is dead for good. Now isn’t the time for political delays and/or finger-pointing.
We can’t just wait this out and hope it fixes itself - it won’t. For too long the dominant rhetoric was PR spin from the administration and the developer; that if they just had a better marketing plan all would be well. Let’s get realistic and start a frank conversation about where we need to go from here. Public-private partnerships aren’t just about ribbon-cuttings, sometimes you have to show real leadership to avert disaster. Now is the time…
Mayor Suggests Income Tax Increase
After reviewing the awful budget submitted by the mayor, I could only conclude that next year he would push for an increase in the income tax in order to make up for the projected $9 million shortfall. His comments in one local paper this morning confirmed it:
The city projects a $9.3 million budget deficit in 2010 and larger ones into the future.
[...]
Henry also suggested the City Council will likely have to take a look at increasing local income taxes.
First the mayor needs to make a good faith effort to reduce spending - something that was certainly not done with this budget. City council should reject this budget out of hand and tell the mayor not to send it back until there’s at least a 1% cut.
And just so we’re clear, if this budget passes as is then the income tax increase the mayor is talking about is an additional 1%. Do you feel like handing the city an additional 1% of your income? If not you had better contact your city councilmember now and tell them to reject this budget and cut it by 2% or more…
City’s 2009 Draft Budget Completely Unacceptable
The administration posted the proposed 2009 budget on their website today and after reviewing it I must say it is completely unacceptable. The budget calls for a mild 0.09% increase in expenses but that doesn’t tell the whole story (remember the budget was flat from 2007 to 2008).
The problem is that starting next year, due to HEA1001, the city will collect $2.1 million less than originally anticipated. And in 2010 the full effect of HEA1001 kicks in and the city will collect $9.5 million less than expected. What this budget does is kick the can down the road and forces a major showdown in 2010. The mayor knows this as his own previous comments confirm what needs to happen:
Mayor Tom Henry on Thursday wrote off increasing local income taxes as a way to help balance the city’s budget, at least for 2008.
Henry told the Northeast Area Partnership, which consists of different neighborhood associations, that he would not ask the City Council to raise the local income taxes this year. Instead, he said the city must find a way to trim $5.8 million from next year’s budget. — A local paper, May 9, 2008
So what happened? Where’s the $5.8 million cut? Where’s any cut? The state legislature phased HEA1001 in for a reason and this budget does not take advantage of that “grace period”. It is fiscally irresponsible to ignore the 2010 challenges and pass this budget without significant changes. We must prepare for next year’s shortfall now.
Let me take a stab at what’s going on here. From day 1 Mayor Henry has tried to fight the effects of HEA1001 by suggesting tax increases instead of spending cuts. If the current budget passes I don’t think there’s any doubt that come next year we will face significant cuts in services. At that time the mayor will push heavily for an increase in the income tax - an idea he floated earlier this year.
What we must do now is cut the budget by 1-2% in order to prepare for 2010. I would suggest that, on average, every department funded by property taxes cut their budget by 1% - that would cut $2.5 Million from the proposed budget. By my calculation, if each department that currently has an increased budget for 2009 were to reduce their budget until it’s flat with the 2008 values. that would save us $1.6 Million of the suggested $2.5 Million.
I think we all understand that cutting the budget is difficult. But if they can’t cut the budget by 1% or 2% this year then how in the world are they going to cut it by 7-9% next year? They won’t of course - they will simply raise taxes. Everyone needs to understand what’s going on here - don’t be duped…
Harper Tops First FWP Poll - Mayor Henry’s Approval Up Next
Our first poll asked which member of city council readers found the most impressive thus far. The results were interesting:
| Harper | 25% |
| Brown | 20% |
| Goldner | 17% |
| Didier | 14% |
| Pape | 11% |
| Smith | 7% |
| Shoaff | 3% |
| Hines | 3% |
| Bender | 1% |
I think we’ll continue doing polls and see how it works out. Please take 2 seconds to answer our latest polling question regarding mayor Tom Henry’s job approval…
Karen Goldner & Stephen Parker Fight Harrison Square Secrecy
If you haven’t seen Stephen Parker’s posts over at Around Fort Wayne regarding the latest round of secrecy behind Harrison Square documents then you should check it out. Parker asked for two specific documents regarding Barry Real Estate’s to-date contributions to the stadium and was originally rebuffed by the Redevelopment commission and the city attorney.
Parker was going to submit an official complaint to the Public Access Counselor when councilwoman Karen Goldner stepped in and negotiated for the release of part of the document (available 9/22/08) that was originally denied.
First, Goldner should be commended for continuing to promote and support open government initiatives. Unfortunately, while we have made progress, this entire exchange shows we still have work to do. There is no reason a city councilmember should have to get involved just so a citizen can get basic public documents that are not exempted from state law.
Kudos to Goldner and Parker…
Hines Hammers Henry
As promised here’s the video of councilman Glynn Hines’ comments leading up to his vote overriding the mayor’s veto on the fire merit ordinance. Hines lambastes Mayor Henry for the lack of African-Americans in his administration, specifically stating that Republican mayors have had more diversity in their administrations than Henry currently does.
I just don’t trust that this administration will do the right thing based on their record in the nine months that they have been in office. They’ve let down the African-American community in not having a single African-American at a department head and there’s been empty promises and I don’t see any commitment like I seen with the Lebamoff administration, even the Helmke administration, Win Moses’ administration, even Graham Richard’s administration. So with that in mind I’m voting yes.
You will never watch a more emotional speech given during city council than the one Hines gave tonight. It is quite obvious that he feels betrayed and rightfully so. I have a feeling that Clifford Clarke’s resignation was the straw that broke the camel’s back. Seriously, watch this:
Veto Overriden, But Not As Expected
As expected councilmen Pape and Shoaff flipped their votes which seemingly would’ve upheld the mayor’s veto of the fire merit ordinance. However, in a surprising move, councilman Glynn switched his vote as well, but this one went from the mayor’s camp into the firefighters’.
Hines also had strong words for the mayor in his lack of appointments for minorities in his administration. I’ll have video of this later - you won’t want to miss this. I would be remiss if I didn’t point out that Dan Jehl and FW Public1 went to the mayor during his transition phase and specifically advocated for his administration to represent the demographics in the city. The group was rebuffed and the mayor has recently removed his only minority administration member African-American department head in Clifford Clarke.
I’ve said it before and I’ll say it again, this administration has been a borderline trainwreck. The mayor has lost the support of the firefighters and now, apparently, councilman Hines as well…
Update: My original comment that Clifford was the only minority member of the administration was incorrect as Kumar Menon is the director of City Utilities. H/T: Ted Nitza
Mayor’s Veto To Hold?
The late information coming in before tonight’s meeting is that councilman John Shoaff has switched his vote and intends to vote against the fire merit ordinance. With Pape already flipping this would mean that the mayor’s veto would hold up. Also, word comes down that the mayor will offer the firefighters the same merit system as the police department.
I should warn that this is all uncorroborated at this point because I haven’t been able to confirm it with councilman Shoaff. I guess we’ll all know soon enough…
Major Props To Liz Brown & Karen Goldner For Considering Tax Abatement Changes
The city council issued a press release today about the tax abatement policy changes that councilmembers Liz Brown and Karen Goldner have been working on. I will admit that I was highly skeptical of any significant changes coming from their 2-person committee but after taking the time to read their proposal I am impressed.
Here are some of the changes:
- Reduced fees for smaller projects making the abatement process more small-business friendly
- Projects designated as Economic Revitalization Areas must now meet all city standards including the wage guidelines.
- Projects in the Downtown Revitalization Area must adhere to the downtown design guidelines (about time!)
- Projects outside of Economic Development Target areas would no longer get the same blanket 10 year abatement as those in targeted areas. They would be evaluated on a point-based system and would qualify for either 3,5,7 or 10 year abatements determined by the number of points
- Added oversight and compliance requirements to ensure applicants are meeting their jobs and payroll promises. No more amendments to the statement of benefits for projects that have changed scope.
Well, well, well - last I heard nobody cared about tax abatement policy! Sounds like at least a few councilmembers are listening to the people. This is a great start to creating an economically sound abatement policy that actually encourages development into areas that need it the most. All of the ideas listed above are ones I support whole-heartedly. Once again, new members are breathing life into the council and local government (hint, hint in regards to the upcoming county council election).
I can’t wait to read what Mike Sylvester, John Kalb and Mark Garvin have to say considering they are the only 3 people that actually care about tax abatements - heh. Here are some additions/changes I would like to see:
