By Jon Seidel, Post-Tribune
jseidel@post-trib.com
INDIANAPOLIS -- Angry citizens blasted Gary Mayor Rudy Clay's plea to a state appeals board to raise property tax caps once again in his city, but board members still seemed willing to work with Clay when a six-hour hearing ended Wednesday.
That's because Clay and his staff told the Indiana Distressed Unit Appeals Board they've made budget cuts ahead of schedule, and they embraced many reforms suggested by its Philadelphia-based fiscal monitor, Public Financial Management.
"Gary is doing business differently today than they were a year ago, but it's not where it needs to be," board member Paul Wyman of Kokomo said when the meeting ended. "We're getting there."
Wyman, board chairman Ryan Kitchell and PFM managing director Dean Kaplan all said it's possible for Gary to live within the caps if they are phased in gradually. However, board member Mark GiaQuinta of Fort Wayne agreed with some citizens who said Gary's total assessed value isn't enough to support local government, a situation he said the tax caps may have exposed.
"I kind of respect the individuals who said, 'Just take a gun and pull the trigger, and there's no more Gary, because you're just prolonging the inevitable, which is the death of this city,' " GiaQuinta said. "Well, I respect that, because at least those people are acknowledging that you can't live within your means."
Bill could pass soon
The conversations took place across the street from the Indiana Statehouse, where the General Assembly could vote within days on legislation to put those tax caps into the state's constitution. A public referendum would follow and, if it passes, the DUAB would dissolve and Gary would be forced to live within the caps.
Those caps limit property owners' tax bills in the rest of Indiana to 1 percent of assessed value for homeowners, 2 percent for landlords and 3 percent for commercial properties.
After Gary's successful appeal to the DUAB in 2009, those caps were set for its property owners at 2 percent for homeowners, 3.27 percent for landlords and 4.55 percent for commercial properties. No other city in the state has petitioned for DUAB relief in 2009 or 2010.
Gary, which hoped to see the caps raised even higher last year, was joined in its 2009 petition by the Gary Sanitary District, the Gary Stormwater Management District, the Gary/Chicago International Airport and the Gary Public Transportation Corp. This year, GPTC opted out of the DUAB process.
Clay and City Controller Celita Green argued they've already made several cuts in 2009, including the outsourcing of garbage collection, closing the city jail, consolidating departments, closing park pavilions and swimming pools and reducing its 2009 workforce from 1,356 people to 991.
Becoming self-sufficient
In 2010, Clay and Green promised to consider several PFM recommendations. They said they are already working to reduce health insurance costs for employees covered by collective bargaining. They also said they will employ a chief operating officer, eliminate board compensation, implement furlough days and pay cuts and transfer animal control and 911 dispatch to Lake County.
In 2011, if the city can't make them self-sufficient, Green and Clay said they would privatize the South Gleason Golf Course, the Genesis Convention Center and the Hudson-Campbell Fitness Center.
Clay and Green said they want state lawmakers to consider allowing second class cities to adopt local option income or gasoline taxes. City Clerk Suzette Raggs also said she has proposed legislation that will let Gary retain all court and casino revenue, which is now split up between the city, county and state.
Gary won some sympathy from the DUAB arguing it doesn't receive its tax distributions on a timely basis. Green said that prevents Gary from paying its bills, and forces it to pay interest on tax anticipation warrants in the meantime.
Blaming Booker
Asked about the hold-up by GiaQuinta, Timothy Rushenberg of the Department of Local Government Finance put the blame squarely on Calumet Township Assessor Booker Blumenberg.
He said Blumenberg is behind on his work and has been sent a letter questioning his performance.
"If we don't get a satisfactory answer by Jan. 15, next Friday, we're planning on doing the assessment work for Calumet Township," Rushenberg said.
GiaQuinta asked Kaplan how massive layoffs at City Hall could affect unemployment levels in the city, where he said the "principal industry" seems to be government. Kaplan said PFM didn't question the state's policy decision while preparing the report.
"Obviously, this makes it harder for people in the city," Kaplan said.
'Hood-winked?'
Some members of the public were skeptical about PFM's work. Nat McKnight said the firm was "Lake-County hoodwinked." Richard Barnes questioned the assumption by PFM that Gary will see a 100 percent property tax collection rate.
"They simply didn't do their homework," Barnes said.
Douglas Grimes of the Miller Citizens Corp. said Gary must be forced to clean up its own house, while Lori Peterson of the Central District Organizing Project pointed out that most city officials were absent from the meeting during public testimony.
"It's not inconsistent with any City Council meeting," Peterson said. "Instead it's representative of the attitude elected officials have toward the residents."
The public testimony didn't seem to significantly sway DUAB board members, though, especially GiaQuinta.
"We have people living in la-la-land on both sides of this issue," GiaQuinta said.
Last year was the first year for the DUAB, and it took four months to rule on Gary's petition. A decision could be made more swiftly this year, as PFM has already scoured the city's finances. The DUAB was also distracted last year by the General Assembly's long budget session. This year's short session must end by March 14.