Thursday, September 5, 2013

Riley Asks If Muncie Can't Afford the Bill, What Has to Go?

By Larry Riley in the Muncie Star-Press:

Muncie’s mayor, given what looks like substantial popularity, is probably the only local elected official who could wage a successful campaign to get city voters in a referendum to agree to raise property taxes.

After all, his administration did hike Muncie’s property tax rate 27 percent this year over last year’s rate, and nobody blinked.

That’s because for many taxpayers, the hike was meaningless: they already are at their maximum property tax limit, the “cap” that was enacted into law in 2008 and now constitutionalized.

Property taxes were capped at 3 percent of a commercial/industrial property’s gross assessed value, 2 percent for residential apartments, and 1 percent for homesteads lived in by homeowners.

Three-percent and 2-percent taxpayers inside Muncie city limits are mostly capped out. So the city’s rate for all they care — this year’s rate: $5.12 per $100 of assessed value — could go to any amount and they wouldn’t pay more.

Most homeowners also are capped out, but many, especially owners who live in modestly priced homes worth less than, say, $50,000, saw their taxes go up because they remain below the cap. Higher rates increase their taxes until they hit that cap.

So if the city — or any unit of local government — wanted more money than caps allow, that unit would have to ask voters in a referendum to approve paying more taxes, amounts higher than the caps.

Now imagine this scenario, keeping with a hypothetical attempt by Muncie’s mayor. Suppose he wanted more tax money, and petitioned for a referendum, and told voters that without higher taxes, he would have to eliminate the police department.

If you don’t vote “yes” on the referendum, police protection by the city will end.

Wouldn’t you consider that extortion? A good, old-fashioned shakedown?

Wouldn’t you ask why not share budget cuts in other areas, rather than decide to stop policing? Police protection is a fundamental service of municipal government.

I can’t see any different between this imaginary example (important note: the mayor has not even dreamed about this, let alone proposed anything) and what the Muncie Community Schools board is doing, threatening to end busing unless a November referendum on higher taxes passes.

See the full article here: