The Outstater: A Need for Civic Heroes

September 28, 2015

“It’s said of financial crises that they take much longer to arrive than you think and unfold more rapidly than you ever believed possible.” — Aaron Renn in the Sept. 14, 2015, City Journal

IN AT LEAST ONE of the seats on a typical Indiana city council sits a civic hero, a man or woman who tries to cast every vote with the long-term interest of the community in mind. If you are lucky, there are two or three. A majority is historic.

These out-voted and oft-misquoted souls are becoming precious as the public debate grows more emotional and ad hominem. They should wear medals. Our foundation’s next journal is dedicated to them. Particularly, it honors two types: those who push back against factional pressure and those who step forward to assert economic truth — however inconvenient either position may be at any given political moment.

The first type, in striving for fiscal sanity, risks becoming the enemy of every policeman and firefighter in the city, the compensation for which can represent 50 to 80 percent of a typical municipal budget. He does so knowing that members of this constituency consider his point of view an unwarranted threat not only to their livelihood but their honor, a constituency able to organize pickets on his front lawn and in effect fire him as their boss.

Yet, there are members of this foundation who have faced roomfuls of such men. And it is important to know that they not only survived the experience but also won reelection. They did so by marshaling the facts. Voters who get the facts understand who exactly is threatening whose livelihood. Those who don’t, don’t.

Ask Detroit. Ask Harrisburg. Ask middle-class homeowners in Chicago who just got hit with “rolling” property-tax increases to pay for fire and police pensions — increases that are double the two largest recent increases combined. Property owners there, in addition to being out of pocket for the extra taxes, will only be able to watch as their housing values fall and an exodus of capital begins.

Indiana cities that move away from such policy — even incrementally — will have an advantage in attracting the investment that flees poorly run nearby cities. And that is not small change. Our friend Stephen Moore, author of “Rich States, Poor States,” reports that Illinois in 2013 lost nearly 67,000 tax filers representing $3.7 billion of income.

One of our civic heroes, the past chairman of an appropriations committee, suggests that councilmen begin thinking of their jobs as the purchasers of local government services, representing both current citizens and potential investors: “That means you can demand that the union provide a comparison of its cost with those of a private provider. You can demand the costs be put to a market test by open and transparent bidding. You can demand that any compensation be based on objective, verifiable and understandable standards.”

We mentioned two kinds of civic heroism. The second is particularly on display in our next edition. It involves overcoming the pressures of the sound-bite politics that accompany government-defined economic “development” projects. These have taken myriad forms in the last couple of decades from straightforward tax credits to more problematic tax abatements to downright inscrutable tax increment financing. But if you stand up in the public square to question any of these experiments in economics by command, don’t expect to be thanked for your diligence. You will be labeled an “obstructionist.”

Here, though, is how one of our civic heroes answers that: “These are all debt-laden projects, meaning that the next generation of elected officials and taxpayers will be held in a financial straitjacket to pay for the particular vision of a few. Thus we lose the big picture, for central planning is really a small vision; it can only think one government-leveraged project at a time; it cannot produce the authentic growth that creates a thriving economy.”

If Indiana succeeds, it will be in spite of the political convenience that allows unaccountable municipal planners and economic-development directors to hold sway over our cities. In fact, the Indiana Chamber of Commerce reports that we have fallen behind in a respected national rating of entrepreneurship. “Clearly, the infusion of central planning, the teaching that the best ideas and easiest source of financing come from local and state government, isn’t working,” a councilman said of the report.

We’re going to need some more heroes.

— Craig Ladwig

Resources

1. Editorial. “City of Big Taxes: Chicago’s Unfunded Government Pensions Wallop Homeowners.” The Wall Street Journal, Sept. 23, 2015.
2. Chris Sikich and Gabrielle Ferreira. “Indiana Slips in Rankings for Startups, Venture Capital Funding.” The Indianapolis Star, June 20, 2015.
3. Ryan Cummins. “How to Deal With a Public-Employee Union.” The Indiana Policy Review, March 28, 2014.
4. Stephen Moore. “Americans Still Voting with their Feet, Fleeing Blue States.” Orange County Register, Sept. 25, 2015.

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