In light of the recent adoption of Local Option Income Tax (LOIT), this may be the perfect time to examine the fiscal health of our city. The report covers 2013 and 2014 and does a comparison between the two years. Being an informed citizen is a good thing, it’s hard to pull the wool over eyes that see.
In addition, knowledge is a tool to prepare for events which can affect a lifestyle. Lowering Your Income Tax (LOIT) which was first mentioned by the Muncie mayor and adopted 14 days later by Muncie City Council is one such thing. Two weeks is barely enough time to get the information out to the masses.
One interesting aspect is the information on the city revenue has been in the hands of nine city council members, one mayor and one controller for three years. Yet, there was never a word said at council meetings, in the newspaper or during State of the City addresses. It was all puppy dogs and happiness.
In the ranks of the people, the concern about the finances was growing. How in the world is the city paying for all this? No one knew. None of this has taken us off guard, seeing it coming down the pike. Interesting the very ones with information at their fingertips either never saw it (odd) or ignored it (likely).
Do need to recognize the speed in which the city racked up $65 million in debt as well as the lightening speed in which a tax was imposed upon every working stiff.
Please feel free to take a look at the fiscal health report. You will find in nearly every category a decrease in revenue and an increase in expenditures. An increase in government owned acreage, an increase in TIF, an increase in local taxes. It’s business as usual.
Predicted in 2011, came true in 2015
In record time, may be a first, the Muncie City Council passed Local Option Income tax citing the decrease in property taxes. Despite Mayor Tyler’s belief there was enough money should the SAFER grant of $2.5 million/year not be awarded. He was adamant…NO LOIT.
The grant was denied- now there isn’t enough to fund public safety. Not enough to fund Economic Development Income Tax (EDIT), it appears. Yet, we were assured there was enough money with or without the grant.
The question is really, how did nine council members and one mayor not notice the decrease in property taxes for three years? I mean, the council works on a budget yearly, the mayor reviews it. So, let’s say they did see the decrease, but felt confident enough to rubber stamp every request be it from the mayor, department heads or the director of Muncie Redevelopment? (Both Gregory and Polk did question at times.)
Recently, Mayor Tyler said it wasn’t the council’s fault it was the property tax caps. Yet, despite the obvious decrease, it never crossed their minds to say no? It didn’t raise a red flag back in 2012? Why the sudden concern? In a span of two weeks the city realized it couldn’t afford public safety, held a public hearing and voted yes to raise your income tax 43%.
Let’s pull out the old excuse…Property Tax Caps. Yet, if caps are the reason, and the elected officials use as en excuse all the time, why do they spend like there are no caps in place? Imagine the possibilites if there were no caps. Nothing at all to reign in their spending. Because the city passed the 2007 budget with increased property taxes and spending, they themselves ushered in the push for caps. We seem to forget our 2006 pay 2007 tax bills. But, I digress…
Why were they so quiet for so many years when the figures were staring them smack dab in the face? Why didn’t the mayor and council inform the public? Did the controller send out smoke signals to the mayor or the council? Do we pay the council members a salary of $15,000 per year to withhold information that affects citizens? Looks like.
Not only do we have an additional tax, we are currently racing to a total debt of $65 million. And this only if we never borrow another penny. So we have graced the citizens with additional taxes and additional debt.
It’s interesting to note, property taxes only bring in about 10-15% of the total revenue (roughly). Sadly, no one seemed the least bit concerned about the renewal of the SAFER grant and their lack of concern gave the impression it was all under control. After all, we’re building canals, buying properties, forgiving property taxes, expanding TIF districts. We are so prosperous, we can’t even fund public safety without additional taxes. The appearance of prosperity is all paid for with borrowed money.
Some watched with concern, wanting to believe Mayor Tyler’s promises. We followed the revenue, and best as possible, the expenditures and found the figures to be disconcerting. As far back as 2011, it was predicted Tyler would move to pass LOIT and the council candidates would vote to approve. This is simply how they have always operated.
Below you will find the financials of the city. I would like you to specifically look at 2011 property tax draw and compare it to the 2012 tax draw. Nary a word to the unsuspecting citizens who cast a vote to keep them in office. You would think the council would feel some obligation to those who trusted these candidates enough to secure their seats.
To put it in perspective, the amount of property taxes received for the General fund only:
2011 – $17,380,388
2012 – $13,708,276
2013 – $14,739,837
2014 – $14,560,426
The total amount of revenue including grants, fees, local, State and Federal taxes etc. The City of Muncie received:
2011 – $90,393,089
2013 – $100,696,634
2014 – $101,147,218
Source: Indiana Transparency Portal Report Builder: Government Financial and Tax Reports
If you have been following the City of Muncie’s financials, a shorted till will be of no surprise. If not, you may find your paycheck missing a few pennies as the rush to fill the cash register gets underway. Yes, folks, the LOIT has entered the minds of our elected officials. L-O-I-T (Local Option Income Tax) if passed by the City of Muncie, digs into the pocketbooks of every working stiff in Delaware County. I believed it was just a matter of time before it was introduced and approved.
I’m not going to spend much time discussing the merits or pitfalls of LOIT today. Instead, I am offering two articles and an opinion piece for your reading pleasure.
The first article is the introduction of the tax, setting the tone. The second, a recap of the first and lastly a column by a local journalist (saved the best for last). Perhaps after reading, you’ll get a better understanding.
Here’s a side note: A few months ago I crossed paths with columnist Larry Riley and the chit-chat soon turned to the SAFER grant. I asked if he knew the status. Nope.
Next question, if the grant is not renewed, how would the shortfall be met? Larry responded (much to what he penned) – Mayor Tyler stated there would be enough money to cover the fire department.
The previous mayor, McShurley, was asked the question in 2011 and her answer much the same. If the SAFER grant did not come through, there would still be money to maintain the fire department. Then she said good-bye and left the city with over $7 million operating balance.
The real kicker is after Mayor Tyler said the property tax revenue was down and the LOIT tax is needed for fire safety and to shore up the coffers of Economic Development Tax Revenue (EDIT) he proposed an additional amount of spending nearing $50 million.
Here’s the short of it all.
1.) Mayor Tyler – the city would have enough money for the fire department. Never a word to the contrary.
2.) Mayor Tyler – the tax revenue is down and will need to pass LOIT to maintain the fire department and EDIT funding.
3.) Mayor Tyler – reveals the $48 million canal project.
Chew on it a while…
Thanks for hanging with us while we took a short sabbatical.
We’ll be recapping the latest fiscal events in a few days and offer suggestions for cutting the budget. Might even dig into the history annals and bring a few good quotes to make you laugh.
See ya soon,
Bus stop: Why and when issue was really decided
Though I’m writing these words prior to last night’s school board meeting, one doesn’t need a lot of tea leaves to divine the outcome.
School officials have made clear they want more money from somebody and busing is the hostage.
Taxpayers wouldn’t agree to give them more taxes in a 2012 referendum by a nearly 2-1 margin.
Creditors worried about repayment of debt successfully lobbied the legislature to make sure they won’t have to part with any money they’re owed.
So now the 20 percent or so of school boards across Indiana that can’t handle their finances appear to be collectively trying to tell the General Assembly that they’ll end busing if they don’t get more money. Muncie Star Press 7-14-15
Read the full column here.