THE OUTSTATER: Mysology and Tax ‘Changes’

August 1, 2012

The definition of mysology is contempt for reason, hatred of truth. The Greek root is a clue that it has been around for a while. Some of us, though, see it waxing, especially in our morning newspapers.

I have my edition in front of me, and we can begin our forensics of the local mysology there. The headline declares:

“TAX CHANGES LIKELY, COUNCIL SAYS, TO FIX CITY FISCAL CONCERNS”

Changes? Fiscal Concerns? The truth apparently was deemed too horrible for subscribers to bear. The diligent reader, though, could eke from the story that taxes are going to increase (a change) because the city is going broke (a fiscal concern).

The mysology continues. We are told these changes and fiscal concerns have caught the city comptroller and other officials by surprise. “We have a lot of work to do and really not a lot of time,” she confided. The city will spend as much as $6 million more than it has next year unless something is done quickly, according to a group referred to in the article only as “the fiscal policy team.”

Three years ago an expert on municipal finances, Ryan Cummins of the Indiana Policy Review Foundation, visited with newspaper executives and officials throughout the state. He told them that unless their cities took dramatic action they most certainly would go broke. He specified that such action would require more than curtailing cell-phone use and the like.

“Imagine that your city is coming up $7 million short this next year,” said Mr. Ryan, pulling a figure out of the air. “Common sense, fiscal reality and municipal budgeting should — I repeat, should — come together to recommend selling, privatizing or bidding out anything that is not an essential government service.”

Mr. Ryan added that even such rigorous privatization would not be enough. Municipal politicians would have to be willing to take on the police and firefighter unions. He noted that in a typical Indiana city, public-safety spending accounts for 70 percent or more of property-tax revenue. And over the last 60 years, state and local government spending has increased to a rate 13 times the increase in private-sector earnings.

So if you were a councilman, let alone a comptroller, wouldn’t that sort of unsustainable divergence jump out at you? Is cutting spending, then, a “something” that our council must do quickly?

Let’s not go crazy. “Changing” tax rates is the reasonable course all agree.

“At some point, you’re going to have to admit you need more revenue,” explained a councilman to our mysologist-reporter. This councilman, representing the most conservative wing of the local Republican Party, was relieved to learn that state law allows the council to increase income taxes even on citizens (county residents) it does not represent.

Perfect. Problem solved.

That will depend, of course, on how our team of mysologists defines problem and solved.

— Craig Ladwig
Resources
Benjamin Lanka. “Tax Changes Likely, Council Says, to Fix City Fiscal Concerns.” The Fort Wayne Journal Gazette,Aug. 1, 2012Matthew Mitchell. State and Local Governments Outpace Growth of Private Sector. Mercatus Center of George Mason University, June 11, 2012.

Ryan Cummins. “Indiana Cities Face September Bankruptcies.” http://inpolicy.org/2010/05/indiana-cities-september-bankruptcies/. Last viewed Aug. 1, 2012.

Cummins. “A Government of Unions: One Councilman’s Experience.” The Indiana Policy Review, pp. 3-6, winter 2011.

Cummins. “At City Hall There Are no More Easy Answers.” The Indiana Policy Review, pp. 4-7, winter 2010.



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