KEVIN LEININGER: Should state create ‘electoral college’ to govern local income taxes?

City Councilman John Crawford passes demonstrators supporting the local income tax increase proposal prior to council's approval in 2017. (News-Sentinel.com file photo)
Kyle Kerley (Courtesy photo)
John Perlich
Kevin Leininger

Even though about 3 million more people supported Hillary Clinton at the ballot box, Donald Trump was elected president in 2016 by winning 304 electoral votes to Clinton’s 227. A lot of people, especially Democrats and others from densely populated urban areas, think that’s unfair. Residents of states that would be all but irrelevant if not for the Electoral College beg to differ.

A similar debate is underway in Indianapolis right now over the control of local income taxes in Allen and a handful of other Hoosier counties in which a single city contains more than half the population — a situation County Councilman Kyle Kerley says allows “a representative minority to increase taxes” while denying thousands of residents any representation at all.

The proof, he insists, was visible in 2013 and again four years later when the votes of six of nine Fort Wayne City Council was enough to increase income taxes for all county residents because about 250,000 of the county’s 355,000 residents live within the city limits. The wishes of New Haven, Huntertown, Monroeville and other members of the Allen County Income Tax Council were more irrelevant than air conditioning in January.

So Kerley, New Haven Mayor Steve McMichael and other county officials were in Indianapolis this week testifying in favor of a bill that would require future tax increases to be approved by elected officials representing more than half of Allen County’s population. Should the bill pass — and it was approved by the House Ways and Means Committee — City Council could pass an increase only if seven members voted to do so. Failing that, any increase would require cooperation between City Council and other bodies: six City Council members and one County Council member, for example.

As with the Electoral College, there are good arguments for or against House Bill 1065. It seems undemocratic to elect a president receiving fewer popular votes than his opponent, but anyone who has seen the map dividing the United States into “red” and “blue” zones knows elimination of the Electoral College would — in terms of geography, at least — essentially disenfranchise voters in most of the country.

That’s the case in Allen County when it comes to local income tax increases, with the added consideration that the current system amounts to an undeniable example of taxation without representation.

Kerley said representatives from other counties with situations similar to Allen’s, including Monroe (Bloomington) and Tippecanoe (Lafayette) testified in favor of the bill, while officials from Indianapolis and Fort Wayne have opposed it for perhaps obvious reasons.

“We are aware of House Bill 1065 and have concerns about it,” city spokesman John Perlich said. The city of Fort Wayne has been transparent with taxpayers and earned the public’s support on how the recent local income tax adjustments were used — increasing the number of police officers and firefighters, investing in parks, completing more neighborhood infrastructure improvements than ever before, and riverfront development. A shift in this process as outlined in the proposed legislation has the potential to substantially slow the progress we’ve been experiencing. The process works the way it is.”

I don’t argue with any of that. But should residents of New Haven, Monroeville or Huntertown pay higher taxes for Fort Wayne’s parks, police and sidewalks? And even though Perlich correctly said Allen County and other towns have been able to implement various projects because income taxes are distributed by population, why should taxpayers provide more money if they do not need it and have not voted for it?

The cash balance in various Allen County funds currently stands at about $120 million, Kerley said, including $30 million in local income taxes. Nor could the county really give it back to taxpayers even if it wanted to: Thanks to state tax caps, any reduction in county property taxes would not lower taxes on homes already at the 1 percent cap and could allow the city or other entities room to increase taxes.

This is, clearly, a contentious and complicated issue and not even Kerley seems optimistic it will pass this year. But the discussion has merit, and so does Kerley’s preferred solution that may be too unworkable to pass, but is logical all the same.

“In my perfect world,” he said, “every municipality would decide these (tax increases) at the municipal level.”

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 kleininger@news-sentinel.com or call him at 461-8355.