Evansville Courier & Press
One theory about local government is that significant downsizing or consolidation does not take place until true crisis pays a visit.
And from our view, that's just what came knocking in past weeks.
Evansville and Vanderburgh County government officials find themselves now facing a genuine financial crisis. They are looking at a total shortfall of a combined $15 million this year and next.
It's the real deal, brought on by legislatively mandated property tax caps and by the reinstatement of homestead tax credits to city and county taxpayers.
Of course, as everyone knows by now, a bipartisan group of elected city and county officials tried to bypass the tax break, but got caught when taxpayers discovered their tax bills were higher than expected this year.
Those officials, with Gov. Mitch Daniels help, are attempting to see those breaks restored to taxpayers. But what that means is the city of Evansville is projecting a loss of $3 million in revenue in 2010 because of the property tax caps, and $3.1 million both this year and next, the result of the restoration of the homestead tax credits.
It remains to be seen how the city will confront its shortfall, while county government began to discuss its problems this past week.
The county is facing the loss of $2.5 million this year and next for the restoration of the homestead credit, plus $1.5 million that the county will lose to the legislature's new property tax caps.
At this point, it might be useful to point out that while the city and county are separate units of governments, taxpayers who live inside the city limits pay taxes to both city and county governments. Hence, this loss is a double whammy for them. Residents, who live in the county but outside the city limits, face only the county government problem.
That fact changes nothing, but may help city taxpayers better understand why it would be to their advantage to support some consolidation of city and county government.
But more to the point of what county and city officials might do now to confront their coming fiscal shortfalls, might this not be just the type of crisis to motivate them to look for new ways to merge city and county government operations.
That's what businesses do when faced with budget shortfalls. Why not local government?
For example, perhaps they could look at a consolidation of city street maintenance and the county highway department.
Or why not take some of the offices in the county and consolidate some of their staffs? How about cross-training the staffs of the auditor, the treasurer, and the assessor's offices, with the expressed intent of reducing the size of the county workforce.
There is already some indication that the county will have to look at payroll. Whether or not that goes beyond pay freezes is not known. County Auditor Bill Fluty Jr. said that most county offices "are salaries and benefits and office supplies."
"Surely you're not going to be able to get enough in office supplies to make these kinds of cuts we may have to make," Fluty said.
Look, as County Council Finance Chairman James Raben said, the county can get through this. They've got $2.5 million in a "jail set aside fund," $2.2 million in riverboat money, $2.4 million in a rainy-day fund, and $2.4 million in unappropriated fund balances.
But these issues are going to go on beyond the immediate problem, as taxpayers continue to receive the homestead tax credits and the tax caps hold down how much can be raised from property taxes.
Over the years, city and county officials have done a good job of consolidating those departments and services they felt could be merged. But now, they should look for more.
Indeed, isn't this the opportune time for city and county officials to meet, and look for the next level of offices where merger can be done.
As for a major consolidation of city and county, that may have to come from outside government, because it will mean, eventually, taking power away from some elected officials.
Even so, the time would seem to be right for that, as well.