Nearly two years after I&M and the city reached a $39 million agreement for the sale of City Light, the real debate over how to use that money – plus $36 million already in the bank from the previous lease of the former city electric company – has begun. Three City Council members this week said they want to use the bulk of the $75 million Legacy Fund not for new projects that would leave lasting legacies but for property tax relief and for streets and other capital needs.
The full council, though, should not simply dismiss the many hours of work dozens of community leaders and representatives spent painstakingly analyzing how the city should use the money. The council should seriously weigh the recommendations of the Legacy committees before pledging the money for anything.
To an extent, the three most fiscally conservative council members – John Crawford, Russ Jehl and mayoral candidate Mitch Harper – have sound reasons for using the money on infrastructure, such as streets. Falling revenue from state gasoline excise taxes has meant less money available for roads and streets. (See Sunday’s editorial for more about this problem.) A sound infrastructure – streets, sidewalks, water, sewers, bridges – is vital for economic development. Reserving at least some of the Legacy money for those uses makes sense.
Property tax relief, though, is a more questionable use of the money. The state legislature has already given Hoosiers substantial property tax relief.
Interestingly, these three council members, who also argue to hold the line on spending, just voted to give the Fraternal Order of Police a 2 percent raise in 2013, setting a precedent to give all other city employees a 2 percent pay increase. That will make city employees happy, and police officers and firefighters are known to influence many votes. But if the city’s budget situation is so troubling that the council members want to raid the Legacy Fund, it’s puzzling the council voted 8-0 with one abstention to approve the FOP contract.
The three councilmen acknowledge they want to keep property taxes flat as a means to force spending cuts by holding revenue down. This “starve the beast” approach often fails, though, because elected officials can nearly always find another source of revenue.
Even if the three council members win over two other councilmen and have a majority backing their plan, it will not be easy to get everything they want. The mayor, not the council, initiates spending proposals. There most likely will not be a single overarching vote on what to do with the Legacy money. Instead, the council will vote an appropriation each time the mayor wants to spend some of it. The council does, though, adopt the city budget and property tax rate; council members could make deep cuts that could require the mayor to use Legacy money to finance essential city services.
Still, the council members are right to raise the issue of using at least some of the money for infrastructure. And it is the council – not Legacy committees – that sets city spending. But the council should acknowledge the work of those committees and not commit the bulk of the money yet. A mix of infrastructure spending and discretionary projects that will leave true legacies would likely best serve the city.
Much of that $75 million should still be available for years to come. The city’s needs, priorities and who holds the mayor’s office and council seats will change. Ways the city will use the Legacy money will very likely change as well.
