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
In earlier posts, discussed the TIF districts, the financial impact and the bill to monitor Redevelopment Commissions. For those which don’t understand the overreach of these commissions, they have the power to spend with very little oversight. No one seems to be accountable.
Recently, Delaware County voted to bond $5 million backed with TIF revenue. The purpose – installing sidewalks – averaging about $500,000 per mile. Last November, the Muncie Redevelopment Commission authorized temporary payments of $4,500 per month for maintenance at the Village parking garage. Muncie Redevelopment and City forgot to include upkeep of the city-owned garage. No word if that expenditure has been continued, perhaps hoping the public will forget. Is it too early to get the amount of revenue for the parking meters and garage? These charges were guaranteed to make the bond payment, ya know.
There has been a successful effort to monitor the financials of local units, and doing so, found MSD‘s overpayment of quoted work by $300,000. Nothing from the mayor on the State Board of Accounts audit. I don’t know where Liberty Regional Wastewater stands today on their petition against the MSD. Some of you may remember LRWD’s rates increased to fund areas in the MSD which LRWD receives no benefit. Money collected for the purpose of separating sewers also went for a natural gas station about 18 months ago. No update on the revenue generated. However, at the public hearing for MSD rate increases, the citizens requested assurance the tax hike would be strictly used for stormwater. Obviously not.
Muncie Community Schools is still in the market for a superintendent and chief financial officer. No word on how that search is coming along or if there are any viable candidates. A county school is looking for a new superintendent, too.
We’ve covered some basics for Delaware County, MSD and MCS, so let’s take a look at Muncie, Indiana’s tax rates, debt and TIF districts. ThIs is basic information but, more than enough to bring you up to speed, if need be.
Muncie’s 2015 tax rate has increased, in 2014, the rate was $4.93. Today the rate is $5.17. Certified tax rate is based on $100 per assessed valuation. Simply, a property valued at $100.00 would pay $5.17 or a little over 5%. If you would like to see the additional tax rates Muncie and Delaware property owners pay, please look at Delaware County 2015 Budget Order here. Of course, property owners are protected with tax caps or we would be experiencing 2007 property tax crisis all over again.
It is a common belief among economists and those who follow TIF districts nationally. Tax Increment Funding increases the tax burden on all regardless if you live in the TIF district. It makes sense as Muncie has expanded and created TIFs capturing tax dollars which would be designated for schools, libraries, and various other taxing entities. Those specific taxing entities, in turn, must increase their levies for funding and the cycle becomes vicious. In addition, economic revenue may take years to realize if it does at all.
Capital investment, according to Todd Donati during his four years as Delaware County Commissioner, ran about $230 million. It is been close to seven years and no financial return in the county. Still as broke as they were in 2009.
I digress. On to the financials of Muncie City.
Currently, Muncie is holding a debt for the next 24 years of $64,285,942. (See report)
The debt was decreased by approximately $4 million in two weeks. (See report)
Two possible reasons for the decrease come to mind. The city paid off debt although nothing has been in the paper. Or the debt was transferred to another bond and the paperwork has not caught up with the transaction. Hard to say at this point.
Muncie TIF dollars (which the general fund or other taxing units will never see) amounts to $49,748,322. Two weeks ago is was $54,437,236. It appears to reconcile with the decrease in total debt.
If you still don’t believe TIF districts are expensive, consider the $30 million in just interest alone. I would also like to point out, these figures do not appear to include the Village garage at $5 million or the hotel at $30 million. All of the debt included in these reports confirmed with loan documentation, which leads me to believe nothing is available on the Village or hotel. At least not on public
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“If you analyze it I believe the very heart and soul of conservatism is libertarianism. I think conservatism is really a misnomer just as liberalism is a misnomer for the liberals — if we were back in the days of the Revolution, so-called conservatives today would be the Liberals and the liberals would be the Tories. The basis of conservatism is a desire for less government interference or less centralized authority or more individual freedom and this is a pretty general description also of what libertarianism is.”
― Ronald Reagan
Been on sabbatical, enjoying some much needed free time. Taking a break on writing political prose. Like most of us, I get fed up from time to time, yet still maintain the eye on what’s happening. After the dismal 2014 local primary, and considering the outcome and events leading up to the primary, sometimes think you may be spinning your wheels. After all, you can lead a horse to water, but sure can’t make the horse drink it. Feeling disenchanted can actually work to the good of your soul.
~See you all soon~
The Citizens of Delaware County for Good Government and participating real estate offices are hosting the fourth annual “Property Tax Appeal Help Day” at the Kennedy Branch Library, 1700 W. McGalliard Road this Wednesday from 6 to 8 p.m. and Saturday from 8 to 10 a.m. The seminar will be followed by questions and answers, and personalized help sessions.
Help Day is to help Delaware County property owners who believe their property tax assessment is too high. We will provide pointers on how to create a successful appeal, and will help complete property tax assessment appeal forms, but we cannot guarantee the appeal outcome.
There is no charge for this service. Prior year’s Help Days have been successful in helping hundreds of property taxpayers find errors on their assessments and preparing property assessment appeals. The deadline to file appeals is Oct. 31. If you file late, you will lose your right to appeal for the current tax year. You may need to appeal your assessment this year, even if you appealed last year and won.
It would be helpful to bring a current property record card so that we can identify errors on the assessment. Also bring photos of your home that show the front, side and rear elevations. Also provide photos of yard buildings, pools or other improvements to the property, plus photographs and documentation of any damages or other issues that detract from the value of the property.
Make two copies of your appeal and all supporting documentation and have them date stamped when you turn in your appeal, keeping one copy for your records.
Scott Alexander is president of Alexander & Co Real Estate Appraisers Inc.