The Outstater

October 22, 2025

Oops, Budgets Require Priorities

HERE’S HOW my city is going to meet the challenges of taxpayer-friendly changes in how property taxes are applied: It’s going to pretend nothing happened. 

The Legislature has reformed the state’s property tax system to provide relief for homeowners and businesses through phased increases in homestead deductions, new tax credits and expanded business personal property tax exemptions. In other words, city councils are going to have less money to  play around with.

In reaction, the mayor has promised to deliver the same services. The city controller will use the same budget strategy she has used previously, hoping it will work this time. 

Isn’t that a definition of insanity? For we have been through this before, i.e., city revenues fall short, we blame someone else, and we continue as usual. Here is a headline from 2012, different council, different mayor, same controller, same crisis: 

“Changes Likely, Council Says, to Fix City Fiscal Concerns.”

What the controller recommended then and now is incremental cuts across the board. A sternly worded letter earlier this month sent department heads searching the sofa cushions for spare change. The department heads are back and we are still $20 million short.

About the same time as that 2012 headline was sounding the alarm, Maj. Ryan Cummins, formerly chairman of the appropriations committee of the Terre Haute City Council, was touring the state for this foundation. He told city officials and newspaper editors that unless their cities took dramatic action they most certainly would continue to face fiscal crises. 

Cummins warned that the remedy would require more than incremental measures, that is, curtailing cell-phone use, take-home vehicles and the like. It would require setting priorities.

“Imagine that your city is coming up $7 million short this next year,” said Maj. Cummins (being wildly optimistic), “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.”

My city operates two golf courses on valuable land. Its many properties, including transportation systems, could be sold or privatized to provide an income stream. It has built millions of dollars in jogging trails and river walks. There are entire departments, beginning with the woke Metro Human Relations Commission, that could be eliminated. It operates a parking garage and has a stake in a government-run grocery store, of all things.

Cummins said even those cuts would not be enough. A council has to be willing to take on the collective bargaining units of the police and firefighters and their pension demands. In a typical Indiana city, public-safety spending consumes 70 percent or more of property-tax revenue.

“You can tinker around the edges saving a few thousand here and there but it will hardly dent the dollar amounts needed to address the typical municipal shortfall,” Cummins later wrote for The Indiana Policy Review. “It is only by confronting head-on the personnel costs for local government that a resolution can be crafted that is in the best interests of all citizens.”

A budget can reduce local government to its proper size and function, Cummins said, which is the protection of life, liberty and property from force or fraud. “If you consider that statement for a moment,” he said, “you realize that it means the elimination of a good portion of what your city government is now doing.”

Cities wouldn’t finance downtown buildings, or sports facilities, or drive nearly empty buses around. The unnecessary costs in capital, operations and labor could remain in the pockets of citizens. And most important, government would be small enough that average citizens could tell what it was up to.

Finally, Cummins noted that over the last 60 years, state and local government spending has increased to a rate 13 times the increase in private-sector earnings. If you were a councilman, wouldn’t that sort of unsustainable divergence jump out at you after a decade or so? But that would take political courage, and that’s not in the budget this year. — tcl

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