Fort Wayne has a $6 million budget deficit and a $65 million backlog of unfunded street repairs that dwindling reserve funds can no longer cover. Too many years of short-sighted planning and a “don’t just stand there, spend something” mentality led to this mess. A bipartisan fiscal policy group was created to fix it.
City officials would have us believe that the loss of revenue due to the property tax caps — $53 million lost since 2009 — is largely responsible for the current condition of the budget. However, the impact of the tax caps was known and predictable for the past five years. If you know that your income is going down, doesn’t it make sense to cut your spending as a first step to solvency?
Not according to the policy group. They have recommended a smorgasbord of new taxes to fill in the budget gaps. The adoption of two new local option income taxes (LOIT), each at a .25 percent rate, is at the top of the list.
These new income taxes would cost the average taxpayer an additional $120 per year and would raise nearly $14 million in annual revenue for the city.
To soften the negative reaction to higher taxes, the policy group proposed a $5 million reduction in city operating expenses. The first recommendation is to add a fire protection fee to the City Utilities bill that would free up $3.5 million in the budget. The policy group has also recommended changing the health care policy for city employees and revamping how sick time is accrued.
Unfortunately, these recommendations do not lead to a true reduction in spending. The fire protection fee adds about $2.40 a month to our City Utility bill. This is technically a “tax increase” in the form of a new fee.
It’s important to remember that the property tax caps were enacted to reduce the size and spending of local government. Cities and counties that responded to the call are in strong financial shape. Cities like Fort Wayne, whose administration lacked even the most basic of fiscal discipline, are now in need of new revenues to maintain their poor spending practices.
Citizens must demand their local government act as good stewards of tax dollars and pass balanced budgets. Until the city learns how not to spend more than it gets, handing over more dollars to the administration to solve the budget problem is equivalent to giving an alcoholic more booze to sober him up.