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Two Chesterton Tribune Editorials:
Vote policy not politics
(below on this page)
A vote for COIT is a vote for Chesterton
Last year the Chesterton Town Council made what could only have been a
wrenching decision when, beset by fiscal uncertainty, it elected not to
grant raises to town employees in 2003.
Wrenching, because its five members never miss the chance to praise the
dedication and professionalism of Chesterton’s police officers and
firefighters, of the crews who plow our streets and treat our sewage and
maintain our parks, of the men and women who make this town safe and clean.
Now, however, the Chesterton Town Council has a rare opportunity, in the
form of a County Option Income Tax, to prove its faith in the town’s
employees.
For the sake of argument, let’s grant the following: The Porter County
Council has badly botched the issue, should have acted last year, delayed
committing itself this year until the last possible moment. For weeks the
County Council had the chance to take its best case to the Chesterton Town
Council and make it at a public meeting. Instead the County Council fiddled.
But the question has long since ceased to be What should they have done? The
only question worth asking now—right now—is What should we do?
The Chesterton Tribune urges the Chesterton Town Council to vote to
endorse COIT. The best available figures show COIT to be the clear choice
for a town desperately in need of revenue and just as desperately in need of
the loyalty of its employees.
Chesterton’s Share
First, contrast the estimated revenues which COIT and a County Adjusted
Gross Income Tax—the County Council’s likely default strategy—would
respectively raise for the Town of Chesterton.
•Chesterton’s share of a 0.2 percent COIT—less a 1 percent homestead
credit—would total some $182,000. Put that figure in context: a customary
$1,000 across-the-board raise for town employees this year, plus a $75 per
year longevity bonus, would have cost Chesterton $85,725. COIT would raise
sufficient revenues to cover that raise and nearly $100,000 more.
•Chesterton’s share of a 1.0 percent CAGIT, on the other hand, would total
only a projected $106,500, or fully $75,500 less than under a 0.2 percent
COIT.
(Under either COIT or CAGIT, an Economic Development Income Tax would be
enacted. Chesterton’s share of a 0.2 percent EDIT would total $278,800 if
that share is distributed in accordance with the town’s proportion of the
total property-tax levy, or $437,000 if that share is distributed by
population. Those revenues can be used for any number of capital
projects—sidewalk repairs or street paving—or else for debt repayments.)
The Taxpayer’s Share
Now consider a married couple with two children, an adjusted gross income of
$50,000, and an annual property-tax bill of $600:
•Under a 0.4 percent COIT-EDIT with 1 percent homestead credit, that couple
would pay $161.60. Under a 1.25 percent CAGIT-EDIT with a projected 13
percent average property-tax cut, that couple would pay $445.75, or fully
$284.15 more.
•Under a maximum 1.0 percent COIT-EDIT—which would not take effect until
2009—that same couple would pay $371, still $74.75 less than under a 1.25
percent CAGIT-EDIT.
Or consider a married couple with two children, an adjusted gross income of
$70,000, and an annual property-tax bill of $1,500:
•Under a 0.4 percent COIT-EDIT, that couple would pay $231. Under a 1.25
percent CAGIT-EDIT, that couple would pay $573.75, or fully $342.75 more.
•Under a maximum 1.0 percent COIT-EDIT, that couple would pay $495, still
$78.75 less than under a 1.25 percent CAGIT-EDIT.
The Clear Choice
Brass tacks: (1) The town’s share of revenues would be far greater under
COIT-EDIT than it would under CAGIT-EDIT. (2) Chesterton residents would pay
far less under COIT-EDIT than they would under CAGIT-EDIT. (3) CAGIT is a
bad tax; COIT is a resourceful one.
The anti-COIT activists are ardent, but in this case they’ve lost sight of
certain flesh-and-blood realities in pursuit of an abstract principle.
Our quality of life in Chesterton depends not on anything so faceless as
“government.” It depends on people, who are working without raises this year
to serve us and protect us.
Members of the Chesterton Town Council who vote for COIT on Monday may lose
friends—they may lose allies—they may even lose an election—but then the
best and the brightest in public office have always been prepared, have
always been eager, to make the hard decision when those around them would
quaver.
Four of five members of the Chesterton Town Council, simply by voting to
hold a public hearing on COIT, have already demonstrated a degree of courage
conspicuously lacking in their counterparts in Valparaiso, Portage, and
Porter.
The Tribune trusts that all five will demonstrate their courage on Monday:
the courage to be unpopular, to change their minds if necessary, to assert
some measure of control over this town’s destiny.
A Chesterton Tribune Editorial:
Vote policy not politics
It is a shame that the Chesterton, Kouts and Hebron town councils are the
only ones with the courage to take a vote on the Porter County Council’s
County Option Income Tax-Economic Development Income Tax proposal.
The three towns may very well feel backed into a corner, now that the County
Council has tentatively endorsed a back-up tax plan for a County Adjusted
Gross Income Tax. But the county really didn’t put Chesterton in this
unenviable spot. The other towns and cities did, by recklessly passing the
buck.
In January, the Porter County Commissioners publicly urged the council to
take a vote on COIT, allow the towns and cities to do the same and then to
be prepared to vote in a CAGIT if the COIT failed. In mid-February, at a
time that it appeared that COIT was dead, this newspaper reported that the
council appeared to have the votes for CAGIT. There has been no secret that
CAGIT-EDIT could very well be the council’s back-up plan.
This newspaper also reported that Council President William Carmichael
intended to bring up CAGIT at Tuesday’s meeting. Because of the unfortunate
time crunch that now exists, the income tax may not get decided until just
minutes before the midnight deadline on Monday.
Reassessment Fears Unfounded
Concerns have been raised about how reassessment will impact property
owners.
Favoring CAGIT based on fears of reassessment rings hollow. The truth is
that no one knows for sure yet the impact of reassessment. State projections
in 2001 showed that the average residential tax bill in Porter County will
go up 9 percent. Porter County’s farms and businesses, meanwhile, were
expected to see a drop in the range of 7 percent. But Porter County fared
much better than the state average. In neighboring Lake County, for
instance, taxes on homes were expected to soar 23 percent.
It was those projections that pushed the Indiana General Assembly to pass a
tax restructuring package last year. The state will increase the homestead
credit from 10 percent to 20 percent and will assume 60 percent of the
school general fund tax rate. That’s a substantial chunk of one’s property
tax bill. Newer projections show that the tax restructuring will lead to an
overall cut—yes, a cut—in the range of around 12 percent for all property,
including homes, after reassessment.
County in Crisis Before Bethlehem’s Demise
Fears have been voiced that COIT will lead to a windfall for county
government, a free for all in spending. This is ludicrous. By next year, the
county government will have lost a cumulative total of around $6 million in
tax revenues from the Bethlehem Steel bankruptcy. And the county government
still has a loan of about $5.5 million to pay back due to Bethlehem, not to
mention the loans that have been taken out, and will be needed, just to keep
county government’s doors open this year. The county will also have to cough
up around $1.4 million for new, federally mandated voting equipment. And
like all other taxing units, it will be set back considerably by this year’s
reduced tax draws.
The county government’s funding problems didn’t happen overnight with
Bethlehem’s bankruptcy. Concerns that departments have been underfunded and
understaffed go back for years.
Back in the 2000 budget hearings—more than a year before Bethlehem declared
bankruptcy—the council, mindful of an ever-tightening budget crunch, gave
departments an across-the-board increase of just 3 percent, lower than the 5
percent state levy restrictions would have allowed. A month or so later, the
council put a halt to additional appropriations and curtailed spending in
other ways, such as restricting use of county vehicles.
In the 2001 budget hearings—a few months before Bethlehem’s bankruptcy—the
council already knew the county couldn't afford employee raises and it put
departments on notice that they couldn’t fill vacancies. It was described
then as the worst fiscal crisis in years. Little did they know what was to
come.
Struggling Back to Good Government
With a COIT in place county departments that have survived years with
slashed budgets will begin to struggle back to meet state staffing
guidelines. County employees may be able to get their first raise in three
years. There will also be a possibility of funding some long-awaited
projects such as the highly acclaimed Family Court, or the award-winning
land use plan which cost $130,000 but isn’t being enforced.
Residents, businesses and farms suffer if local government is weak. Builders
and developers are the first to complain about delays in securing approvals
from the plan commission, building department and health department. CAGIT
will do next to nothing to restore these services and will cost wage earners
more for little in return. The county government, projected to get no more
than $800,000 from CAGIT annually, will still be forced to make deep cuts in
spending. People will pay a new tax that will cost them two to three times
as much as a COIT would initially, but their government services will still
diminish.
COIT will cost wage earners less, even if it is allowed to reach the maximum
1 percent in nine years. It will provide the revenue county and municipal
governments sorely need.
Say yes to COIT.
Posted 3/28/2003
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