JEAN'S THE HUMBLE RUMBLE: Prudent Reaction To The Economy

Jean Johannigman

Each day we listen to the television, radio and read the newspaper to discover yet more devastating news concerning the economy. Extensive taxpayer funds have gone for extensive bail outs. To what avail? Where will this all end? Or should we be asking where exactly should we start?

We might consider that old saying that “Charity begins at home.” What are my thoughts with this? With the economy in the state that it is…should we be considering and following through with capitol projects of millions and millions of dollars?

Consider this quote from this linked article: http://www.bondsonline.com/News_Releases/news11180803.php - Begging for Bailout Cash, U.S Cities Told to Go Fish.

“Whether you're a municipal bond investor or simply a taxpayer, this should make you feel a little queasy. This isn't good news.”

Some would say….in the case of Lincoln St. an adamant “YES”! as we have a grant that may likely not come along again. While grants in most cases are incentives to proceed with a project….what will happen in these economic times? In order for the city to come up with the $3.7 million in matching funds for the Lincoln St. project….the city will bond the project out (backed with property taxes for the best bond rate) and pay the bonds back with tax monies taken in through the TIF district. Sounds simple, but what if the estimated increases in TIF funds do not materialize OR the current taxes being paid into the TIF district change because of the economy? What that means is that it would come back on the property taxes to make those bond payments. The new police station is currently being paid for in a similar manner and I would think that something comparable to this might be set up if the airport project progresses.

Is the economy to a point where all of these large capital projects should be reaccessed out of protection for the taxpayers? For the protection of our city as a whole? While all of these projects could stand to give us an edge in the arena of Economic Development….does that really matter if there is no money to invest? Should these projects be placed on hold until the economy is a bit safer or should we go ahead and spend hoping upon hope that if we build it they will come? Has anyone checked on the availability of funding and the rates for municipalities and how it will affect the overall cost of projects of this magnitude? 

Who really does know the answer to these questions? Perhaps it should be the people that it will affect the most……the taxpayers. I can’t help but feel it would be extremely prudent at this time for our local officials to call for a referendum on these projects if they anticipate continuing with them. I do realize that the Lincoln St. project made it in under the wire of being eligible for referendum, but in these financial times, our local officials could really show that they care about the financial burden of the taxpayers by letting them have their say in this and other projects of this magnitude.

The following is a quote from an article that talks about the new referendum law:

“A new era of citizen control over property taxes starts Tuesday when a law requiring schools and governments to receive referendum approval for large, publicly financed projects takes effect.” For further information I am also providing the computer link to this article for those interested in reading more.

http://www.indianalawblog.com/archives/2008/06/ind_law_law_req.html

If any of you reading this column find that you are as concerned as I am about pursuing these extensively large financial investments for our community under these trying financial times, I would like to suggest that you contact our mayor, contact our councilmen, attend the next council meeting and ask them to reconsider these projects and put a hold on them until the economy improves.

I encourage our local officials to consider the following quotes:

“The power to tax involves the power to destroy.” - Supreme Court Chief Justice John Marshall, 1819.

“If Patrick Henry thought that taxation without representation was bad, he should see it with representation.” - The Farmer's Almanac

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