By Kirk Johannesen, The Republic
johnannesen@therepublic.com
The fate of capital projects in Indiana communities will depend largely on how lawmakers view and define the referendum process the governor proposed as a way to limit spending and reduce property taxes.
Gov. Mitch Daniels suggested use of the referendum while listing points of his property tax plan during a statewide speech Oct. 23.
A referendum lets voters decide if construction projects and spending plans should be approved or rejected.
Daniels believes a referendum gives local residents more direct say in major spending decisions that will have the biggest impact on local tax bills.
Indiana uses a petition and remonstrance system, in which people have to gather signatures for or against the project.
While Daniels' plan painted broad strokes, he's leaving it to the state Legislature to determine the details. Specifically:
How much does a project have to cost to be subject to a ref- erendum?
When will a referendum be held? During an election? Separately?
"The specifics about how referendums would work will be determined as the property tax plan legislation makes its way through the General Assembly," said Jane Jankowski, the governor's press secretary.
The General Assembly begins its short session Jan. 8.
State Rep. Sean Eberhart, R-Shelbyville, believes Daniels left the details to the Legislature on purpose.
"It's not the only time he's left something up to us to decide. I'm glad he left that for us to decide the threshold," said Eberhart, who represents part of Bartholomew County, including Hope.
Lawmakers first must determine if a referendum is the best process, Eberhart said, then determine procedures for using it.
What is significant?
Daniels' plan doesn't include a specific threshold for referenda.
A starting point for debate might be the threshold for a remonstrance, Eberhart said.
A remonstrance can be initiated against any project costing $2 million or more, according to Jack Ross, executive director of Legislative Services Agency.
Eberhart believes mayors, city and county councils, and school corporations should be consulted before setting a threshold.
"That will have a great effect on their jobs, and they have a right to be included in the discussions," he said.
Another hurdle for projects - unless lawmakers make changes - begins in 2009, when the citizen tax board in each county begins reviewing all capital projects of $7 million or more.
State Rep. Milo Smith, RColumbus, doesn't like the idea of setting a fixed dollar amount that is the same for every county.
The needs, wealth and ability to fund projects vary among the 92 counties.
"What is right for Marion County wouldn't be right for another," he said.
Smith and State Sen. Greg Walker, R-Columbus, prefer using a percentage of total assessed valuation of a taxing district to determine a threshold.
"We need to come up with some type of magic number that if a project met it would trigger a referendum," Walker said.
When is right time?
Legislators also must determine the best time to hold referenda.
They could be included in primary or general elections, or held separately.
"I think trying to do that with the primary or general election as a question on the ballot would be the best way to do it," said Norma Trimpe, Bartholomew County Clerk.
A referendum question would be added to the ballot, and any costs would be included in the total election cost.
Holding a special, separate vote for a referendum would be costly, because it would involve using precinct workers, printing absentee ballots and setting up voting machines.
The cost of the 2006 general election for Bartholomew County was $186,862.57, Trimpe said.
Philip Deardorff, superintendent of Flat Rock-Hawcreek School Corp., said a referendum adds expenses to taxpayers, but a remonstrance doesn't because it is largely paid for by the groups trying to gather signatures for and against the project.
The opposing groups pay for signs, advertising and renting meeting halls, and spend their time knocking on doors to gain signatures.
Tying a referendum to the next general election has been proposed as a law, Smith said.
He's concerned that could slow construction and spending projects too much. Also, general elections are held three out of every four years, he added.
Deardorff noted that construction costs rise the longer projects are delayed, and, ultimately, taxpayers pay more.
Walker thinks it's good that projects be studied, presented and evaluated in a timely manner. Tying referenda to general elections would do that.
He's concerned, though, about emergency situations.
Daniels said his plan allows local governments to respond to situations where exceptional spending is deemed necessary if community residents waive the spending growth limitation in a referendum.
"I hope to not create another layer of bureaucracy that doesn't allow taking action when needed as a community," Walker said.
Smith suggests using an absentee ballot system for a referendum, and having a simple majority prevail.
It would ensure that voters' decisions are private, unlike the remonstrance system, Smith said. Also, only people interested in the referendum question would vote. A referendum question in a general election is open to uninterested parties who might oppose anything that would raise taxes.
"I have been floating it around the Capitol and it has been getting a positive response," Smith said.
Deardorff argues that sufficient action against capital projects already exists because school corporations statewide have lost to remonstrances about half the time.
"If half are approved and half are not, where is the system broken?" Deardorff said.