Very interesting article in the Indianapolis Business Journal with outgoing Mayor Bart Peterson, and how Indianapolis is going to get screwed with Daniel’s proposed property tax reform.
IBJ: The Legislature is preparing to substantially reform Indiana’s property tax system. Lots of Indianapolis residents are very concerned about their property taxes. They want to see them reduced and permanently stabilized. What can the mayor do specifically, as opposed to the Legislature or other officials, about that problem?
Peterson: There’s only a limited amount that the mayor can do. You control the property-tax-supported spending that the City-County government engages in. But you can see how limited that authority is by the fact that property taxes in 2008—our last budget—the city property taxes that I’ve had responsibility for are actually going to be lower than when I took office. And yet, of course, property tax bills have skyrocketed.
One of the key things to keep an eye on in property tax reform is how are the interests of the cities being taken into account? Property tax payers have to be the number one concern, and they will be. I’m confident of that. Property tax payers will be winners in this restructuring. The question is what condition are Indiana’s cities going to be left in after it’s all over?
One of my highest priorities, had I been re-elected, would have been to be an advocate for Indianapolis and Marion County in that debate. An advocate without a vote, but nonetheless an advocate. I don’t think there’s anything more important to the future of Indianapolis than making sure that we have enough money to have excellent public safety, that we have enough money to be able to run local government. Because local government is the level of government that most touches people’s lives.
IBJ: You repeatedly trimmed local budgets that you controlled for the city and county. If Gov. Mitch Daniels’ property tax plan goes through as proposed, it would eliminate an estimated $100 million in local revenues. If a city the size of Indianapolis is forced to make that substantial a cut, or to increase its income taxes equivalently in response, what will be the result?
Peterson: The answer I just gave deals partially with that, in saying I think that’s an example of how, with taxpayers being the winners, as they should be, there’s got to be somebody who’s a loser. And it seems pretty clear that’s going to be the cities.
You’re not going to find $100 million of fat in the city and county budget. If the city of Indianapolis and Marion County have to cut $100 million in spending, believe me, people will feel it. This won’t be the city we want it to be if the city has to lay off police officers, close parks, not pave streets or build sidewalks, all those basic services that city government provides. That needs to be understood and taken into account in the upcoming debate.