Community Comment:

Daniels is working hard to fix state's revenue structure

To those whose careers are extended or terminated by the ballot box, elections — particularly those reflecting an anti-incumbent sentiment — and public opinion polls have a way of focusing their attention.

Such was apparently the case in early November when Gov. Mitch Daniels and the power elite in the Indiana state capital were greeted by headlines in their local newspapers announcing that strongly favored incumbent Indianapolis Mayor Bart Peterson had been severely upset by Greg Ballard, the unknown Republican challenger.

Within a week of the election, word filtered quietly out of the Statehouse that Daniels was interested in sitting down for a few minutes with members of the Indiana Tax Repeal Alliance, a relatively new, grass-roots coalition of taxpayer activists from around the state. This was an unprecedented move thus far in his administration. It was said that the governor wanted to listen to their ideas and seek common ground with the group, which is currently calling for the total repeal of residential property taxes.

Ushered into the ornate, pleasantly appointed private offices of the governor by two senior members of his administration, members of the alliance were situated around a beautiful table built especially for the governor by prisoners at the Westfield Correctional Facility. The design is worthy of comment: It boasts an inlaid design of the seal of the state of Indiana. Beneath the seal is a mosaic map of all 92 counties in the state — brightly colored puzzle pieces meticulously carved of Indiana hardwoods.

Having met for a couple of hours prior to the meeting in an effort to assign certain remarks to specific members of the group, alliance members were guardedly skeptical going into the meeting with the governor.

As the conversation unfolded, they were pleased to learn that Daniels is fundamentally in agreement with the concept of repealing property taxes. He said his administration had taken a long, hard look at the idea when pulling together his multifaceted plan.

In the end, the administration found it virtually impossible to do all at once, perfectly understandable when some 24 percent of all local property tax levies go to pay long-term debt service generated by various local entities with bonding authority, a full 18 percent of which is encumbered by local school construction costs. The governor said total repeal of property taxes would require an increase in state income taxes, which he believes would be damaging to the state's economic recovery.

During the conversation the governor reiterated his plan for a classified system of property tax "caps" or "circuit breakers" to be locked in by a constitutional amendment at 1 percent for residential, 2 percent for rental properties and 3 percent for industrial and commercial properties.

He discussed the state taking back the remaining portion of school funding at the state level along with child welfare payments. Responding to criticism from local elected officials who are concerned about soaring costs of operating the courts, jails and other aspects of the criminal justice system, Daniels seemed to be in a frame of mind that he was willing to negotiate on some of these points.

When the conversation turned to the topic of appointed local property assessors, the response was mixed with some alliance members remaining undecided. Others said local assessors should be more accountable to state officials rather than local elected officials.

There were, however, areas of strong agreement. Alliance representatives wholeheartedly support the idea of reducing the number of individual taxing districts in their respective counties.

Notably, it was remarked that Lake County, represented by Jim Premeske of Hammond, Ind., has more than 88 individual taxing districts, many times that of the average county across Indiana.

Alliance members are also firmly behind public referendums pertaining to large, bonded public works projects over $10 million.

Finally, alliance members wholeheartedly support Daniels' goals of placing real, sustainable curbs on the spending habits of local units of government through the regulatory powers of the Department of Local Government Finance and the newly established powers of Local Tax Adjustment boards.

While many alliance members probably came away from the meeting with mixed emotions and just as firmly committed to the concept of repealing property taxes, two impressions no doubt remain etched in each of their memories of the meeting.

Daniels is an incredibly intelligent and thoughtful individual. No matter whom he consulted or how he came up with his tax-reform proposal, he is making an honest effort to address a totally unsustainable situation regarding the future revenue structure of the state of Indiana.

David Coker is president of the Vanderburgh County Taxpayers Association.

For the past several years, taxpayers in Evansville and Vanderburgh County have become outraged over a number of public works projects proposed by city and county officials. It is time for taxpayers to organize.

Some viewed talk of spending nearly $50 million for a new county jail proposed for property adjacent to Highway 41 North a bit over the top. Others questioned the millions being spent for a new headquarters for Central Library downtown across the street from the recently renovated $40 million Centre, another project for which there was no political constituency. They also well remember the nearly 8,500 signatures collected on a remonstrance petition in opposition to the proposed county-wide Victory theater bond issue -- a project which was later rammed through by then-Mayor Frank F. McDonald, II despite the intense public opposition expressed throughout this community.

But here in the new century, while some of the names and faces have changed, the behavior of the power establishment in this community remains very much the same.

Taxpayers are now being asked to approve a proposed $70 million bond referendum being proposed by the administration of the Evansville Vanderburgh School Corporation (EVSC) and are watching in amazement as the highly unpopular $24 million downtown baseball stadium is being rammed through by Mayor Russell Lloyd, Jr. and his cohorts.

A brief look at the aggregate spending figures for local city, county and school corporation operations over the past several years shows why local taxpayers are outraged and asking serious questions about what we can be done to stop the insanity downtown.

From city budget documents cordially unearthed by reference librarians at Central Library, several hours of study reveals that municipal spending in Evansville has risen from some $15.4 million in fiscal 1973 to over $142.6 million in 2001, roughly a 922 per cent increase in dollar terms over 28 years (note: all reported figures are not adjusted for inflation). Similar figures gleaned from numerous handbooks of School Statistical Reports from the Farm Bureau Local Affairs Committee in Indianapolis and the school corporation show a similar growth trend. EVSC spending from 1979 to 2001 rose from $40.5 million to over $133.9 million, representing a 320 per cent spending increase in 22 years. This means that with the additional $70 million in tax levy proposed in the School Corporation’s referendum, EVSC budget authority could easily exceed $200 million by fiscal 2010.

Finally, thanks to the good offices of Terry Lukeman, County Council Secretary, I was able to learn that county spending increases, while more modest than the city and the school corporation, also rose from some $15.2 million in 1972 to $75.6 million in fiscal 2002, a 490 per cent increase over the 30 year period.

It is hard to imagine any local corporation or business which has experienced anything like this enormous growth in their net profits after taxes.

It also demonstrates why Vanderburgh county has lost its competitive advantage to other counties with respect to ongoing economic development efforts.

If pressed, local decision-makers will probably attest that some of these increases were forced upon local units of government by unfunded federal mandates and that some of the spending represents state and federal money returned to local government in the form of grants.

Still, in all, the money was obtained from somewhere -- ultimately taxpayers.

What is perhaps even more important is the effective burden these enormous spending increases are placing upon a shrinking tax base.

With the help of employees of the Area Plan Commission, I was able to find city and county census data from the Bureau of Labor Statistics. Over the 30 year period from 1970 until 2000, the county increased in population from 168,772 to 171,922 representing an increase of some 3,150 residents. However, during the same period the population of the City of Evansville showed a dramatic decrease of from 138,764 to 121,582 -- a loss of 17,182 residents (this statistic was deleted from the original story).

From these data it is easy to understand why people like Pigeon Township Trustee Paul Hatfield are outraged over yet another Tax Increment Financing district in his township and taxpayers across the city screaming foul ball regarding the Mayor’s baseball stadium plan. Over time, a larger and larger tax burden is being carried by a dramatically shrinking city population.

With all of these facts plus the looming property tax reassessment in mind, a small group of concerned citizens are calling for the creation of a Vanderburgh County Taxpayer’s Association in an effort to require our local elected and appointed officials to halt this outrageous spending and make them more politically accountable. Our first meeting in this organizational effort will be Thursday March 6th at old McCutchanville School at 7:00 p.m.

All Vanderburgh County citizens who are either taxpayers or registered voters are urged to attend.

(David Coker is an Evansville free-lance writer. His email address is