Hogsett Claims City Faces $50 Million Structural Deficit After Raising Income Taxes 10% This Year

Indianapolis taxpayers are paying 10% more in local income taxes this year thanks to a tax increase outgoing Mayor Greg Ballard's administration enacted with city-county council approval. Ballard began his administration 8 years earlier with a 65% increase in local income taxes his predecessor enacted with city-county council approval. Nevertheless, it's all doom and gloom as Mayor Joe Hogsett prepares his first budget in office. "Yes, but we've got a $50 million structural deficit, don't you understand that?!" Those were the take away words Hogsett wanted a reporter for the Indianapolis Star to report on his first 100 days in office.

The Star's Brian Eason says Hogsett's administration says his predecessor's "honestly balanced budgets" were in reality running a $50 million structural deficit for a number of years. Eason story says the Ballard administration relied on the city's rainy day fund to meet budget shortfalls. He cites the Great Recession that occurred at the beginning of Ballard's term and property tax caps as the chief culprits for the deficit. Government budget problems reported on by The Star are always the result of taxpayers paying too little in taxes.

Naturally, the reporter makes no mention of either the 2007 or 2015 income tax increases enacted, the storm water fee increases and a host of other tax and fee increase enacted during Ballard's two terms in office. Also omitted is the fact that when the state enacted property tax caps it also assumed responsibility for the funding of certain costs previously funded by the local property tax, such as child welfare expenses, which were covered by a higher statewide sales tax increase. And of course there is no mention of the expanding TIF districts that continue to consume an ever larger percentage of local property tax revenues to fund the pet projects of the mayor's campaign contributors.

Eason says Hogsett is making efforts to cut costs, such as the elimination of the Department of Public Safety, which is expected to save only about a half million dollars a year in personnel costs. Contract re-negotiations for all three public union contracts are up this year and Hogsett has favors to return since he received the endorsement of those unions in this past election. The city is expected to get more road and income tax money from the state as a result of changes approved by state lawmakers this year, but Hogsett says that alone won't solve the city's budget woes. The mayor is not ruling out another tax increase. The fact that IndyGo is planning to permanently increase its overall operating budget with another quarter percent increase in the income tax for bus rapid transit doesn't earn a mention in the story.