Although I spend most of my time writing about Indianapolis-related issues, Munice has gotten my attention as of late, because it seems to be a test case for what could happen here in Indy next year.

Due to property tax caps, Muncie faces a $3.8 million budget shortfall, and the city’s Mayor Sharon McShurley is laying off 36% of its fire firefighters and closing stations in order to help address that deficit.  What is also intriguing about Muncie is that officials who are firing firefighters are expecting the township fire departments to pick up the slack.

This has gotten the community in a uproar, and a community action plan to consolidate the Muncie Fire Department with the Center Township fire Department in Delaware County to help solve the problem, was vetoed by McShurley.  Proponents say consolidation would save more than a $1 million and coupled with other measures could close the gap.

This is interesting because watching the fire consolidation debate up north, reminds me of the debate here.  And if I were a township trustee with a fire department, I’d pay close attention.  Not only are property tax caps going to take a big chunk out of their budgets, but increases in the homestead exemption will also hit local governments.

The City-County Council will vote Monday night on consolidating IFD with the Perry Township Fire Department.  And the bi-partisan opposition is primarily political, some Democrats want to deny the Mayor a victory and some Republicans want to protect other township trustees because the more mergers take place, the more pressure is put on existing township fire departments to join.

But if I were a Marion County township trustee with a fire department and I oppose consolidation, I’d get in my car and head up to Muncie.  Your future will be staring right at you, up close and personal, and don’t forget to ask for some layoff slips.

“This is like a local union having financial issues and the national comes in and takes it over.”

– City-County Councilor Duke Oliver in a radio interview complaining about the state plan to merge the Capital Improvement Board and the Marion County Building authority.

See it to believe it

Indiana House Democrats today said  they will present their own budget on June 11 when the special session begins because they don’t trust the Republicans’ numbers.

In a media availability today,  House Speaker Pat Bauer and Ways and Means Chairman Bill Crawford said they wanted to re-craft the budget so schools would be held as harmless as possible.  The two said schools are losing millions of dollars under the current GOP plan.  They plan to present a one-year spending plan as opposed to the traditional biennial budget.

They plan to hold their own budget hearing on Tuesday, in the House Ways and Means room which is the same room where the current joint sub-committee on the budget is holding its hearings.   Since the room is controlled by the House the joint committee is getting booted.  Exactly where is unclear.  Democrats walked out of the budget hearing yesterday, saying they did not like the way the hearing was being conducted and they did not trust the Republicans.

On a side note, I asked Bauer and Crawford about reports of the two of them feuding behind the scenes.  Chairman Crawford me “that does not deserve an answer.”  Draw your own conclusions.

As state and local lawmakers begin thumbing through the details of new Capital Improvement Board plan being pushed by Governor Mitch Daniels and Indianapolis Mayor Greg Ballard, I think this little friendly reminder is in order.

Don’t forget to add $7-9 million into the equation!

The $7-9 million is the amount of revenue generated by non-Pacer/Fever events at Conseco Fieldhouse.

The Daniels/Ballard plan assumes the new Facilities Management Board of Marion County (FMBMC) will pick up the $15 million in operational costs of Conseco from the Pacers.  The plan reduces those costs through cost savings and efficiencies, but cash management only gets you so far.  

As I have maintained before, if the new FMBMC assumes operational control of Conseco, it should also get the revenue from the facility.  There is no reason for the Pacers to get any non-Pacer/Fever.  And anyone who tries to draw a parallel to the Colts needs to be reminded that was a bad deal that got Indianapolis into this mess into the first place.

So that $15 million in operational costs for Conseco, is actually more like $6-8 million.  And  we haven’t even started looking for those savings and efficiencies.

Don’t forget.

Governor Mitch Daniels and Indianapolis Mayor Greg Ballard are calling for a new Capital Improvement Board that would oversee Conseco Fieldhouse, Lucas Oil, the new Convention Center and the major City-County properties.

The New CIB would combine the Marion County Building Authority and create the Facilities Management Board would be created.  It would create a purchasing consortium to achieve savings.  The FMB would oversee the jail and arrestee processing center, juvenile justice complex and public safety communications.

The new head of the CIB would be the still be appointed by the Mayor and it is unlikely that current Board President Bob Grand will remain in that position. 

The mayor would get three appointees, the governor – 2, the City-County Council – 1, County Commissioners  – 2, and the head of the Convetion and Visitors Association would also have a seat.

It would expand the PSDA to include the JW Marriott.  And there would also be increases in hotel/motel tax, car rental tax and ticket tax.

The plan would save $47 million by capturing $27 million in expense cuts and $20 million in revenue.

• $13 million – from combined operation efficiencies of the CIB and Marion County Building Authority
• $10 million – previous CIB cuts
• $4 million – credit back up to cover CIB debt service obligation
• $4 million – hotel tax from 9 to 10 percent.
• $6 million – increase in Marion County admissions tax from 6 to 10 percent
• $2 million – increase in car rental tax from 4 to 6 percent
• $8 million – expansion of Professional Sports Development Area

Auditors hired by the Daniels administration did a comparison of the CIB operations to cities of similar sizes and found it spent an average of $3.42 for every $1.36 spent by other cities.

You can download a copy of the CIB Fact Sheet here.  New CIB Fact Sheet

And audio from today’s press event can be found here.  Daniels/Ballard News Conference on CIB

Governor Mitch Daniels and Indianapolis Mayor Greg Ballard are expected to unveil their plan to solve the Capital Improvement Board’s $47 million shortfall this afternoon at 3:30 p.m. at the Statehouse.

There are no new broad-based taxes and the plan relies heavily on cuts and “creative” revenue streams, but I am hearing the plan may not fully solve the CIB’s funding problems if the economy continues to stay south; revnues were down 8-percent last year which could leave a $10 million shortfall.

I’ll blog more later today.

The Indiana State Teachers Association, under the control of the National Education Association, put out a memo today saying they are going to cease all long-term disability payments after July.

You can read the entire memo at the link below.

ISTA Memo

ISTA Trustee Ed Sullivan also said in the memo that ISTA will no longer accept contributions from school districts after July and will solicit bids from other carriers to create and insurance pool.

If they can’t school districts will be on the hook for their own long-term disability insurance.

ISTA is under investigation by state and federal authorities over alleged mismanagement of it insurance trust fund.

The 2nd Circuit Court appeals in New York has issued a stay in the Chrysler bankruptcy proceedings.   The Court has agreed to hear arguments on behalf of Indiana Sate Police, Teacher’s Retirement Fund and the Major Moves Construction Fund.  

The hearing is set for Friday at noon.   State Treasurer Richard Mourdock says the state’s appeal will make the following points.

• The secured creditors, such as the Indiana funds, have been made secondary to unsecured creditors in contravention of longstanding bankruptcy law. The proposed sale gives majority ownership of the company to the government’s preferred unsecured creditors, while secured creditors receive only 29 cents on the dollar.

• The federal government has illegally used TARP funds to leverage this sale because the United States (US) Congress intended TARP funds to solely be used to aid “financial institutions.” If the US Congress wanted TARP funds to be used for the automobile industry, why did they specifically try to craft a separate bailout bill that ultimately failed? Chrysler, LLC is not a “financial institution” and therefore the government’s sale plan is illegal.

•  The government’s plan constitutes an illegal “sub rosa” plan and not an arm’s length transaction.  Chrysler’s receipt of federal TARP funds has compromised its independence, and Chrysler has become a puppet of the federal government. The proposed sale is an insider transaction that gives 20% ownership to Fiat, an Italian company, which is not investing a single dollar in exchange for their ownership interest.

Although Governor Mitch Daniels and Indianapolis Mayor Greg Ballard won’t roll out a Capital Improvement Board funding shortfall solution until Thursday, reliable sources say the plan will not include any broad-based taxes; much to the dismay of the Mayor’s critics and political enemies.

Previous discussions had included using a food and beverage tax or increasing local or state alcohol taxes to help cover the $47 million shortfall.  However both plans died quickly  due to a lack of support in the legislature and an outcry by the public.  And if the city captured all the revenue from non-Pacer events from Conseco it could capture between $7-9 million in revenue, offseting the $15 million operational costs of the facility.

“A broad-based tax is off the table and there are no plans to revisit it,” said a source close to the negotiations.  “There is a light at the end of the tunnel and I don’t think it’s a train.”   Officials do plan to move forward with increases the hotel-motel , car rental, and ticket taxes.

Sources say staff in the Mayor and the Governor’s Office are contiuing to look at efficiencies and other forms of “creative financing” to close the remaining funding gap, which at this point is less than $15 million.  And as reported earlier, consolidating the operational functions of the Convention Center, Lucas Oil and Conseco Fieldhouse  could also yield savings.

However, eventhough local officials are feeling good about the plan they are drafting, one potential complication is another revenue shortfall, as proceeds from CIB properties are down more than 8% due to the slowdown in the economy.