Wednesday, May 26, 2010

A Tax By Any Other Name is Still A Tax

An Indianapolis City-County Council committee yesterday voted 6-1 to raise a number of business taxes, er "fees," as requested the administration of Mayor Greg Ballard. The Star reports:

A City-County Council committee gave its nod Tuesday to a series of fee increases that would help pay for tougher regulation of certain businesses and stricter enforcement of city codes.

The proposal, recommended in a 6-1 vote by the Rules and Public Policy Committee, would boost licensing expenses for 27 businesses including hotels, taxicabs, massage parlors and dance halls. It also would increase the costs for construction permits and fees for code violations.

The full council is expected to vote on the proposal next month

The one bright moment of the meeting was new councilor Angel Rivera who pointed out the obvious...why aren't the ones who break the law financing he program instead of law-abiding business owners. Again the Star reports:

Angel Rivera, a Republican councilman, voted against the proposal because he opposes certain aspects of the measure. Among them is charging good-faith business operators, such as five-star Downtown hotels, to subsidize inspections for what he calls "bad apples" -- hotels that become hotbeds for illegal activity.

Hotel annual licensing fees will increase from $20 to $372 under the proposal.

As I recall during the 2007 campaign, Candidate Greg Ballard counted user fee increases on businesses and individuals as being "taxes." Now though it appears that Candidate Greg Ballard's evil twin, Mayor Greg Ballard, wants to change the terminology so that fee increases aren't counted as "taxes." Apparently the Republican majority on the Council believes that by calling a tax a "fee" it can escape responsibility with the electorate for increasing taxes...sort of like the same way the Republican councilors think they can explain in a soundbite world that the CIB tax increases shouldn't count as tax increases since they mostly impact non-Indianapolis residents. It is wishful thinking.

As I recall, just a few months ago, the Council participated in an administration coop, led behind the scenes by AT&T lobbyist Joe Loftus, to can Indy's telecom director Rick Maultra's. Maultra's offense? He advocated that the telecoms, like Loftus' AT&T, pay for using the City's right-of-way like they do in virtually every other city. Maultra's proposal would have raised millions for the city.

I heard a number of councilors, mostly Republicans, remark at the time that the telecoms wouldn't pay these fees, that the businesses would just pass along the fees in higher rates. While I don't agree with that reasoning (competitive pressures don't always allow business fees or taxes to simply be passed along to consumers) it's interesting to see Republicans use this argument selectively. Using the telecom argument of last December, the business taxes, er "fee" increases, the council committee approved last night, will get passed along directly to consumers. Of course, as the Council ponders raising taxes disguised as water fee increases, we shouldn't be too surprised.

Mayor Ballard and the Republican-controlled Council: Make no mistake about it, a tax increase by any other name is still a tax increase. You will pay a big price for your abandonment of fiscal conservativism come the 2011 elections.


M Theory said...

I think that Ballard learned these tricks when he was whisked off to attend Goldsmith's mayoring class at Harvard.

The rest of the hijacking of our mayor was done on that trip to New Albany to see President Bush. Ballard sat in the back seat between Joe Loftus and Bob Grand and was told how it would be done.

The voters who campaigned and worked day and night for him, were never given that level of access to our mayor after the election.

Pity...he won't win re-election.

Melyssa said...

Does anyone know how we paid for the sidewalks already in place? I'm sure they never repealed those original sidewalk taxes after the sidewalks were built. Where's that money going now?

Anonymous said...

Angel has been pro business all along. MCRCC have been pro tax. keep angel, dump ballard and tojo

Downtown Indy said...

It makes my blood boil when, time after time, they find some fee or tax and justify a huge increase (like in this case as much as 800%) by saying 'Well, it's not been raised in many years.'

So what? Why not recognize it's due for an increase and tghen gradually raise it so people can adapt to the new expense?

Not that I buy the Bob Lutz BS about the fees not covering the cost of administering as being the motivation for it.