The Road to Prosperity
September began with a bang when the State of Indiana levied fines of $12,500 on a local construction company for work being done at Muncie’s City Hall. The city’s building commissioner, who is the owner of the company, Advanced Walls and Ceilings, said he took a hands off approach when his business was awarded a contract and knew nothing about the violations, as well as Mayor Tyler. Mayor Tyler plans to appeal to the State of Indiana.
Last week the Muncie Star Press newspaper reported the Building Commission tagged the headquarters of Team Democrat candidates for code violations. There was no construction or remodeling going on, and no other units received violations.
The initial implication of the red-tagging was that the dissidents — who prefer to be considered the mainstream Democrats now, as was noted in an earlier W/R column — had been targeted by appointees of Mayor Dennis Tyler, the standard-bearer of the mainstream Democratic Party.
Source: W/R REPORT: Dissident Dems red-tagged by city Star Press 9-7-14
The building commissioner could not be reached for comment. The mayor however did comment.
“No, absolutely not,” Tyler said. “I will not allow them to be treated any differently than any other organization.” Source: W/R REPORT: Dissident Dems red-tagged by city 9-7-14
Well, O.K. Let’s move on.
September 8, 2014 Muncie City Council was presented with a $16 million bond. I think the bond will be approved. Such a difference in attitudes from when the $2 million Tuhey Pool bond was presented to the council. So many questions, so many no votes. Tuhey bond eventually passed.
Then President Sam Marshall wanted to cut the pool’s utilities in 2011. If his recommendations were accepted by council, the pool would not be able to operate. Council woman Gregory asked the cuts be read into the minutes, and three years later you won’t find the cuts although it is the responsibility of the City Clerk to add it into the minutes.
Do you ever wonder how much additional tax dollars will be needed if the $16 million bond is approved? It will put Muncie at $26 million in bond debt since June 2013. The newspaper didn’t report the interest rate or the length of term. Putting together a rough estimate of how much the bonds will cost lumping the debt under one umbrella, a conservative low interest rate of 1.9% and a term of 20 years.
Here’s how it could shake out:
The monthly payment $130,302.00. One year payment equals $1,546,624.00 Interest paid if the bonds went full term $5,272,449.00. Tax Increment Funding is captured property taxes and placed in accounts for the purpose of improving an area.
Because Muncie is considered an “overlapping” taxing municipality, the downside is captured property tax revenue from TIF districts is withheld from school corporations, libraries, sanitation districts, etc. In other words, any additional property tax revenue is not distributed outward. In some circles, it’s only considered economic development if it benefits the community as a whole without shortchanging other entities.
Certainly government finances can be daunting, and some TIF districts fly under the radar. A lot of people can’t tell the difference between city or county, two separate taxing entities. Eventually, TIF information will be available on the in.gov website.
To put it in perspective, the amount of property taxes received for the General fund only:
2011 – $17,380,388.56
2012 – $13,708,276.93
2013 – $14,739,837.98
The figures represent how property taxes fluctuate from year to year. Keep in mind, this is only the amount of property tax revenue for the GENERAL fund and does not include other tax revenue, grants, fees or miscellaneous income.
The General Fund which includes tax revenue in addition to property taxes:
2011 – $23,560,587.24 (Certified tax rate N/A)
2012 – $20,943,385.41 (Certified tax rate 1.2329)
2013 – $22,754,053.41 (Certified tax rate 1.6204)
Again, it’s obvious how taxes can be unstable as well as a stable form of income. There is not enough space or time to do a major breakdown on revenue streams, you can visit the report builder at in.gov for further details. The 2011 certified tax rate was not broken down by taxing units, which accounts for the n/a.
To simplify $26 million bond payment of $1,546,624.00/year is what would be needed. Maybe we’ll collect it from TIF revenue, maybe not. We’ve never received a true breakdown from Delaware County’s economic development efforts.
Anyway you look at it, Muncie will need an additional amount of tax revenue totaling in the millions for the additional bonds. I suppose the Mayor , the controller and the Muncie Economic Development has looked the books over and decided there will be enough tax dollars available. I hope the city council will be just as diligent watching over every penny as they were from 2008-2011. Budget meetings are just around the corner.
Note: Bond figures are hypothetical and meant as demonstration only. Rates and totals have not been released.