Thursday, July 8, 2010

Fire Hydrant "Tax" and Property Tax Caps

I have some sympathy for West Lafayette Republicans. The party has put them in an impossible position.

At the state level the Republican party is pushing to make property tax cuts permanent through an amendment to the Indiana constitution. During the past legislative session, some Republican mayors even wrote House Minority Leader Brian Bosma in support of that amendment. Some larger political calculation apparently trumped local needs. West Lafayette will lose $400,000 in revenue next year because of the current state property tax "circuit breaker". The cost of providing an important public safety service like fire hydrants; $261,440.

Matthew Greller, IACT Executive Director (Indiana Association of Cities and Towns) made an excellent point in a recent IACT newsletter. He wrote: "Unfortunately, I believe that it is the citizens of municipalities who will pay the price for tax caps being portrayed as the obvious answer."

Our recent debate over fire hydrants makes that point clearly. The state plays the "good guy" and is happy to make the city the "bad guy". People have grown awfully fond of public fire protection, so local Republicans are "outsourcing" a tax increase to the water company. Instead of paying for the hydrants using either income tax or property tax, fairer measures of a person's wealth, everyone, whether a Purdue dean making $230,000 or an elderly widow with a $23,000 income, will pay exactly the same $2.37 each month.

Perhaps we should just pay for the hydrants out of the waste water utility. We heard the boast made during the metered trash conversation that the utility is in wonderful shape. We cover other deficits - and some general fund spending - in that way. (We can then borrow - Resolution #08-10 - to pay for new sewer projects !) Water sprayed on a fire will run into the sewers.

Next year we may rent our fire hydrants. The year after, our fire trucks? I am opposed to this trend in public finance. Local Republicans should be up in arms about it too.

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