By Kevin Smith, Pharos-Tribune staff writer
kevin.smith@pharostribune.com
Logansport Mayor Mike Fincher told local lawmakers on Saturday he was frustrated by the budgetary problems of local government and an apparent lack of understanding in the statehouse of what those governments are up against.
Before a crowd of about 100 people at Saturday's Third House session, Fincher criticized state government for "homing in on property tax relief" and for diverting gas tax money to pay for 150 new state police officers rather than for road and bridge repair as intended.
He said that city shortfalls over the next three years are expected to increase from $1.2 million in 2009 to nearly $2 million by 2011, with the city still unsure of how much its revenue stream will be.
"The city of Logansport did not receive tax draws from June until December," he said. "The governor and the state of Indiana sat on that money for one whole year while we had to operate on reserves. ... How do we set a budget when we don't know our tax draw. And we have no way of knowing, unless we pay a consultant $25,000 to 30,000 to tell us."
State Sen. Randy Head said there were a few things the state was trying to do to address the problem, especially among the 20 freshman lawmakers, many of whom are from a local government background. He acknowledged, though, that those efforts so far had been unsuccessful.
These include measures to redistribute funds to all counties by increasing casino entry fees by $1 and keeping gas tax revenues at the local level.
Head said he felt consolidating city and county services was the way for local governments to save money, and he praised the combined emergency communications center as an area where Cass County was leading the state.
He conceded, however, that the state needed to do more to encourage government entities to work together.
"My perspective on local government is that there are currently no incentives for them to be efficient," Head said. "Governments may reduce their budget, or consolidate services, but there is no reward for local governments to do that."
Fincher said the city and county were continuing to explore ways to consolidate government services, but had run into problems. He said a recent discussion about consolidating city and county parks into a parks division ended because of problems with the definition of home rule.
For melding of services to continue, he said, there should be a reform to the local tax format.
"County residents pay five taxes, but a city tax means that city residents pay six," Fincher said. "As we meld together, should we eliminate the city tax and raise the county tax so everyone pays the same?"
Rep. Rich McClain said after the meeting that the state had already taken some responsibilities away from city government.
"One of the things that he has to remember is that during the last session we took the obligation of personal finance pension fund off of his hands," he said. "The state now picks that bill up."
He also noted that county councils had the authority to increase revenues by adopting a local option income tax. The county council voted last year, though, not to take that step.
During opening remarks, McClain acknowledged that lawmakers had some work to do to put the state back on sound economic footing.
"The economic forecast does not look good," he said. "We need to manage our way out of the faltering economy, not tax our way out of it."
McClain suggested ways of putting more money in the hands of Indiana residents by introducing self assessed property taxes, and by adopting a four-day school week.
By staying longer at school four days a week, McClain argued that $300 million could be cut in state budgets through reducing the use of school buses, spending less on fuel, food costs, drivers and food service workers wages and reducing the wear and tear on buildings.
John Bevan, superintendent of Southeastern Schools, who was present at the meeting, expressed concern at McClain's suggestion.
He said that students would suffer from taking a day out of the week.
"Forty percent of the students in our schools have free or reduced price lunch," Bevan said. "If they don't go to school today, they don't eat two meals."
Head discussed progress on his two bills to enhance penalties for Internet child molesters and to protect teachers from fraudulent lawsuits. He also mentioned the ongoing proposals to cap property taxes at one percent for residential owners, two percent for agricultural and rental properties and three percent for other business property.
Head said that if the proposed constitutional amendment on tax caps was blocked by House Democrats, the fight would likely end up in court.
"If that happens," he said, "it will be a mess that will last for a long time."
The Intiquity Inn played host to the hour-long session, which was sponsored by the Logansport-Cass County Chamber of Commerce.