LOIT

Saturday morning rambling: Fiscal Health – City of Muncie: Business as usual

Posted on Updated on

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.

Fiscal Health Muncie 2013-2014

Saturday morning rambling: Hello LOIT. Where you been, Big Spender?

Posted on Updated on

OLYMPUS DIGITAL CAMERA

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

2012- $124,112,776

2013 – $100,696,634

2014 – $101,147,218

Source: Indiana Transparency Portal Report Builder: Government Financial and Tax Reports

2016_Levy_Freeze_Reports (pdf)

Muncie debt 9-23-14

Unit Total Debt 3-8-15 Muncie

Saturday ramblings: The till is running short.

Posted on Updated on

cash register

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.

Mayor seeks local income tax increase

Still unknowns in new tax plan

No, no, no to LOIT, er, yes to LOIT

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.

City riverfront canal project: $48M

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…

Saturday ramblings: The $60 million question or is it $62 million?

Posted on Updated on

“Are you feeling lucky, citizens?  Well, are you?”

Making a play on words from Clint Eastwood’s famous movie, Larry Riley’s  column continued with an outline of the debt the City of Muncie has accrued over the past few years. Read the rest of this entry »

Indiana SB 176 Central Indiana Transit

Posted on

no loit quirk sign

LOIT comin’ back?

Here we go again, an opportunity for Muncie City Council to open back up the LOIT debate.  This time we can be taxed for public transportation throughout the county.

In 2009, if you will recall, Muncie City Council held a public hearing to pass a tax on every working person regardless if you lived in the city or county.   It never got passed, and I don’t believe it was ever tabled.  Somewhere in the abyss it’s still festering.    This time though, Indiana wants to use it for transportation.

At least, voters will have a say instead of allowing nine people to make the decision.  The majority of which salivate over any tax increase, where spending millions delights and barely blink an eye at increasing city tax levies.    The majority increased the Muncie City tax levy and the budget, County was looking at passing Cumulative Capital Development (CCD tax).  They also came out in support of $45 million tax increase and finally in ’09 the love for the Wheel Tax  came to fruition.

LOIT was their baby, too.

Muncie City Council ignored the budget for nearly two years, and what is the first thing when realizing there is a fiscal problem?  Why increase your taxes, of course.   Last year the city ended with over $8 million balance and a tax increase.  Proof any time is a good time for more taxes with the majority of Democrats in office.

Anderson Herald Bulletin has a down and dirty article.

Summary SB176:

Provides for the establishment or expansion of public transportation services in an eligible county through local public questions placed on the ballot under ordinances adopted by the fiscal body of the eligible county. Provides that Delaware County, Hamilton County, Hancock County, Johnson County, Madison County, and Marion County are eligible counties. Authorizes eligible counties to fund approved public transportation projects through various parts of the local option income tax rates that are available under current law for other purposes and by imposing on C corporations a county income tax or a county employment tax. Specifies that fares must cover 25% of the operating costs of a transportation system established or expanded under the bill. Authorizes interlocal agreements, public-private partnerships, and bonding with respect to a public transportation project. Provides that if a transportation project is approved in an eligible county, transportation services must be provided through the transportation project throughout the eligible county and must be made available under this article to all citizens of the county. Prohibits a political subdivision from using public funds to promote a position on a local public question regarding transit. Prohibits an eligible county from carrying out a light rail project. Provides that in the case of a public transportation corporation in an eligible county that has approved a local public question, labor agreements may provide for the nonbinding mediation of salaries, wages, and salary and wage related fringe benefits, including accident, sickness, health, dental, vision, life, disability, retirement benefits, and paid time off. Provides that the provisions in the bill do not create a moral obligation of the state.

Click on the Indiana General Assembly for  SB176 and 2014 Session.

Indiana general assembly 2014 copy

Delaware County, Living on the Edge and $25,000 Financial Report

Posted on

American Dollars Falling from the Sky

Last night the long-awaited financial report was presented to the County Commissioners and the County Council.  For a mere $25,000 we learned the county has money, we just need to move it from one fund to another.  Take for example, the Highway Department.  According to the Umbaugh report, the ending balance for this department is $2.8 million.  Move some of it, all of it, or none of it into the Rainy Day Fund and from there use it to pay expenses from the general fund.

I am no CPA and I wouldn’t presume to tell them how to do this job, their findings ain’t nothing different from we have been sayin’.  Of course, revenue from additional taxes and cuts in the budget go hand in hand with shuffling money.

The report also states a revenue stream for public safety of $2.5 million from an income tax called Local Option Income Tax (LOIT) can help ease the financial burden.

But, my question is simple, if the county is in good shape, we have the money, and all the report’s recommendations are followed, why would any additional taxes be needed?

So, without further ado, much has already been said, here is the link to the Muncie Star newspaper (available for seven days):

Report: Delaware County could impose new taxes

Heres the $25,000.00 report:

Comprehensive Financial Plan

More will be forthcoming, for now let’s just chew on this.

City May Be Short Millions….

Posted on Updated on

At the same time, Tyler acknowledged that Democrats will now control both city and county government locally and with that control comes expectations.

“This isn’t going to be easy,” he said. “. But I think people will be pleasantly surprised.”

WALKER/ROYSDON REPORT: Tyler: No ‘good old boys club’

tyler

The cats out of the bag now.  The newspaper reported today the city might be millions of dollars short in property tax revenue.  Ouch.  Back in ’09 the city was $4 million dollars short and by the time the past administration left office, there was $7,596,218 balance and the tax levy decreased in 2012 from 2011. Read the rest of this entry »

Parks & Recreation, Good Old Boys and $76,000.00

Posted on Updated on

Now that the little matter of the $7.5 million dollar budget has been cleared up, it’s time to turn our attention to the recreational season. 

Yes, folks, summer is just around the corner and it will be time to get the piers out at Prairie Creek,  Tuhey Pool open and Canan Commons off the ground and ready for outdoor fun.

But, that’s not all.  Muncie City was awarded $150,000.00 in grant money to build a mountain bike trail and eventually extend the trail from  Cardinal Greenway to Prairie Creek campgrounds.   This will be interesting to watch and view the progress.  Let’s hope the weather holds out and we can get it completed in a timely manner and within cost. Read the rest of this entry »