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Cracks are showing in Mayor Henry's budget 'deal'

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The Fort Report

This week's show will feature Fort Wayne-Allen County Department of Health Commissioner Dr. Deborah McMahan, who will discuss problems associated with absent fathers and what can be done to address them. The episode will premiere at 5:30 p.m. Saturday on Comcast Channel 57 and FiOS Channel 27 and later at

But the inevitable squabbles are preferable to Washington-style alternative

Thursday, May 23, 2013 - 12:01 am

With so much money at stake, it was bound to happen and now it has: Mayor Tom Henry's carefully crafted and well-choreographed plan to close the city's budget gap is being picked apart by a combination of politics, philosophical differences, division of governmental powers and – perhaps most of all -- wishful thinking.

That's not necessarily a bad thing, since the recommendations were largely developed behind closed doors and presented in a bipartisan news conference that made passage seem like a fait accompli.

But now that done-deal perception has been shaken by a series of events that have raised legitimate questions about the plan despite near-universal agreement that some kind of corrective action is not only necessary but unavoidable.

Wishful thinking? That point became clear Tuesday when City Council postponed a vote on changes to employee benefits Henry's hand-picked “Fiscal Policy Group” had included in $6.4 million in proposed spending cuts. Many of the would-be changes have already been implemented in the private sector and some government agencies but the Coalition of City Unions believes they should be approved through negotiations, not imposed. So the two sides, which have had since March to work things out but haven't, apparently have three more weeks.

Philosophical differences? Republican Councilmen Russ Jehl and Mitch Harper did the public a service last week by suggesting that the budget could be balanced without the proposed 0.5 percent income tax increase. Few seem to have noticed, however, that their proposal would accept higher property taxes through annexation and an increase in the amount of property taxes the city collects (levy), the impact of which may or may not be offset by higher property values.

Politics? Republican Allen County officials have vocally objected to the fact that City Council could impose an income tax on all county residents – including those who live outside the city and no representation in the debate. On the other hand, the supposedly independent economic development group Greater Fort Wayne Inc. this week supported the fiscal group's plan -- in an e-mail that was sent out by the Democratic mayor's office.

Division of powers? The nature of local government has complicated what was already an inherently difficult process. In addition to the “taxation without representation” question noted previously, it's also true that the city would have to share any income tax increase with other governmental units, which is one reason why it is talking about an increase larger than required to meet its own needs. Conversely, annexation would reduce the county's revenues, and a larger city levy would reduce the amount of property taxes available to other governments in Allen County. That's one reason county officials say they and perhaps others should have been included in the fiscal group's discussions from Day One – and they have a point. A more broad-based approach may have yielded more broadly acceptable solutions.

But there's another assumption lurking in the weeds that must be addressed before taxes of any kind go up: The notion that additional savings cannot be found without drastically affecting crucial city services.

Jehl and Harper certainly don't make that assumption and have noted, among other things, that the city has paid more than necessary because of its insistence on adopting higher union wage scales for construction projects costing $350,000 or more under the state's “common wage” law.

But John Crawford, who chairs Council's Finance Committee, said Council will be asking a more fundamental question: What is the minimum level of services Fort Wayne residents expect and are willing to support? In other words, the need for more taxes could be reduced or eliminated if people and politicians are willing to accept less government. "How you get there depends on where you want to go," he said.

In theory, the common-wage issue alone could save millions, but city services are hardly extravagant and, as Greater Fort Wayne Inc. noted this week, the ability to improve roads, parks and other services without going into debt to do it would make the city not only more livable, but more attractive to prospective employers.

An increase in property taxes would affect fewer people; higher income taxes would be spread over a larger area and provide more money for other governments, some of which are also low on cash. I'm not yet convinced either is needed but can at least appreciate the fact that Fort Wayne is engaged in a spirited, intelligent and serious debate about how best to pay for the government its residents demand.

If only it would catch on in Washington.

This column is the commentary of the writer and does not necessarily reflect the views or opinions of The News-Sentinel. Email Kevin Leininger at, or call him at 461-8355.