EVANSVILLE— It's one sentence in a 26-page plan for consolidating Evansville and Vanderburgh County governments, but a televised debate Wednesday night gave voters a glimpse of the arguments it could spark if they say yes to merger.
"Any increases or decreases in Tax Rates that are the direct result of this Plan shall be phased in over a three (3) year period, beginning with the year 2015," says the Plan of Reorganization at the center of the referendum vote to be held Nov. 6.
A consolidated government's first election would be held in 2014.
During a live televised forum at the WNIN-PBS9 studio in Downtown Evansville, Mayor Lloyd Winnecke and County Treasurer Rick Davis — opponents in the 2011 mayoral election — said the phrase means different things to them.
Winnecke began the exchange by answering "no" when asked if property taxes would go up in a consolidated government.
"The plan does not call for the taxes to go up," said Winnecke, a Republican who defeated Democrat Davis last year.
The mayor went on to note that residential property owners have additional protections against tax increases that would work for them in a consolidated government as they do now — namely, the state's phased-in property tax cap of no more than 1 percent of a home's assessed value.
The county auditor's office reports 14 percent of homestead properties have reached the 1 percent tax cap, a percentage it calls a floating number based on such factors as each property owner's assessed value and existing deductions for each.
The phase-in provision, Winnecke said, was intended to do two things.
It is a reference, the mayor said, to the expenses of 15 local government agencies already administered and jointly funded by city and county governments.
"The sharing of those will be phased in over a three-year period (if consolidation is approved)," he said.
The joint agencies are funded in most cases using ratios determined decades ago by each local government's executives. The phase-in provision means their costs will be "equalized," Winnecke said.
The phase-in provision — Article 7.1.1 in the reorganization plan — also was intended as a safeguard in case future mayoral administrations and Common Councils prove themselves to be big spenders unconstrained by frugality or prudence. Such elected officials, Winnecke said, "may have a less conservative view on how to spend money."
But the phase-in provision doesn't actually say any of that.
Winnecke said after the televised forum it is his recollection that the 12-member citizens committee tasked with crafting a consolidation proposal in 2010 intended the phase-in provision as he said. He added he had confirmed that interpretation earlier in the day with Ed Hafer Jr., finance and tax subcommittee chairman for the citizens committee.
Davis had his own interpretation, and it too is not actually stated in the phase-in provision.
The provision was crafted in anticipation of across-the-board property tax increases in a consolidated government, Davis believes.
"Nowhere in the plan does it say we will not raise your property taxes," he said.
Davis used the phase-in provision as a launchpad to argue higher post-annexation property tax bills for Knight Township residents are a precursor to what would happen under a consolidated government. It is a notion fiercely resisted by consolidation advocates. They say Davis is blurring the difference between annexation and consolidation, which would provide for two taxing and service districts that mirror existing city and county boundaries.
Before the televised forum, Davis said the phase-in provision "tells me that the reorganization committee anticipates property taxes will go up across the board and they are planning for taxpayers to be sucked into a three-year tax hike undertow rather than electing to throw taxpayers into the deep end of the tax hike pool in a 'sink or swim' fashion."
The phase-in provision was intended to ease taxpayers into a tax hike and avoid the jarring impact of sticker shock, Davis declared.
"The language in 7.1.1 also includes the word 'decrease' — but honestly, when was the last time property taxes decreased?" he said. "And if consolidation is supposed to save taxpayer money, then why on earth would our new government leaders postpone a tax decrease if they truly felt consolidation would save money?"
Winnecke conceded the phase-in phrase may be ambiguously worded.
Sorting out its true meaning, he said, could be a function of the transition board that would set up shop in anticipation of the new consolidated government taking office in January 2015 after 2014 elections.