Wednesday, September 3, 2014

Indianapolis' Tax, Borrow and Spend GOP Councilors See 20 Year Road Improvement Bond Proposal Stall in Committee

Last Thursday, Indianapolis Council Republicans failed in the Public Works Committee to push through Proposal 212 which would allow Indianapolis to borrow $110 million over the next 20 years to pay for street, roads, sidewalk and curb improvements in 2015, which not coincidentally is an election year.  The $110 million in IndyRoads Revenue Bonds would be in addition to $20 million regular budget of the public works department.  The Democrats successfully amended the proposal to
Councilor Zach Adamson
reduce the amount borrowed to $70 million. 

According to the Democratic chairman of the committee, Zach Adamson, the reduction would save more than $16 million in interest and would allow the annual bond payments to be paid from the additional gas tax revenue that Indianapolis is expecting to receive from the State of Indiana.

Adamson discussed the possibility that $70 million borrowed might be supplemented by up to $45 million from the downtown tax increment financing district.   Republican Councilor Jack Sandlin objected that those TIF dollars are suppposed to go to economic development.  Later, Sandlin claimed that any excess in the downtown TIF district should be returned to taxpayers, a suggestion that is completely at odds with Sandlin's consistent support for every tax increase and taxpayer funded corporate welfare proposal considered by the council.

Councilor Jack Sandlin
Republican Councilor Ginny Cain protested that money from the district could only be spent downtown.   Council Chief Financial Officer Bart Brown, however, said that the administration had successfully established that the entire county is in the downtown TIF district when it gave Visit Indy $8 million from the downtown fund even though much of Visit Indy's operations are outside the county.

With regard to the companion appropriation measure, Proposal 213, the Democrats successfully offered an amendment reducing the money appropriated to $35,000, apparently with a similar amount to be spent in a second year.
Councilor Ginny Cain

A vote on the amended Proposal 212 and 213 was tabled until the next meeting of the Public Works agreement.   According to the Democrats on the council this will allow more time to negotiate with the administration.

The one area in which there was agreement was on Proposal 214, a measure that would eliminate the 2019 sunset on the excise surtax and wheel tax.  Discussion was that the continuation of the tax would help fund the IndyRoads Revenue Bonds and that without the taxes, the City wouldn't have the money to pay the bonds after 2019.  Not mentioned was the fact that Councilor Adamson had said the reduced amount would allow reducing the bonds to $70 million would allow those bonds to be funded completely by state gas tax revenue Indianapolis would be receiving.  My guess is that primary source of funding for revenue bonds is not as certain to continue as suggested by the administration and councilors.

1 comment:

Flogger said...

If I recall correctly "The City" according to Erica Smith - "using funds from the Downtown tax increment financing (TIF) district, will kick in $10 million to pay for the road construction in and around campus."

I work as a Volunteer and my work takes me all over "The City." I have found an appalling condition of streets, roads and side walks once you leave the Green Zone ($) of Downtown.

If I were a Councilor in some of areas I would be pounding the table and demanding to know why we can provide an annual stipend for the Pacers and other Crony-Capitalist Schemes for Downtown but the neighborhoods surrounding Downtown have the look of a crumbling city.