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Report shows biz tax elimination shifts burdens to others

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By Lesley Weidenbener
TheStatehouseFile.com

INDIANAPOLIS – Gov. Mike Pence’s plan to eliminate the tax on business equipment would mean significantly higher taxes for other property owners if the state took no specific action to protect them, according to a new analysis.

Read the LSA report
Screen Shot 2013-12-24 at 12.47.51 PM

The proposal would also mean big losses for local governments – unless another tax was created or increased to make up for the revenue.

And to do so with the individual income tax would mean a statewide average increase of more than three-quarters of a percent, according to the report from the nonpartisan Legislative Services Agency.

That could mean an additional $577 a year for a family with taxable income of $75,000. And for residents of the state’s more manufacturing-heavy counties, the amount would be substantially higher – as much as three times more.

Interactive map
Click the map below to see how large of an income tax increase would be needed in each county to replace the personal property tax.Property tax graphic 12-24-2013 -2

“It all depends on the mix of the properties you have that you’re able to tax,” said David Bottorff, executive director of the Association of Indiana Counties.

“Ironically, it’s the communities that in general have been the economic hubs that are hurt the most – Howard County, Spencer, Gibson, Lake – the counties that have a lot of job creation and they rely on the personal property tax to help hold down everybody’s taxes,” Bottorff said. If the personal property tax is eliminated, “those are the ones that pick up the biggest shifts and the losses. It’s really a statewide issue but those are the communities that have the most to lose.”

The personal property tax is imposed on equipment used by businesses. Personal property can be a photographer’s camera or an automaker’s metal stamping machine or a newspaper’s printing press and it makes up about 14.5 percent of the state’s taxable property value.

Currently, the tax generates nearly $1.1 billion for cities, counties, schools, libraries and other local governments, according to the Legislative Services Agency report.

But Pence says it’s an impediment to business development and so he wants to dump it, a proposal that’s been backed for years by the Indiana Chamber of Commerce.

The tax “discourages companies from investing in new technology and the expansion of their businesses,” Pence said in a speech this month. “As the most manufacturing-intensive state in the nation, we are holding back new capital investment because of our business personal property tax.”

However, Pence has not said how – or if – he will back replacement revenue for local governments. He says he’ll leave that decision to the General Assembly.

And his office had no comment on the new report. His press secretary, Kara Brooks, said, “Our policy team has not seen the report yet and this is the first I’ve seen of it as well.”

The report, which was released Monday, provides a peek into some of the options, although it advocates no position.

The report found that:

Eliminating the personal property tax without other changes would shift costs to other property owners.

That’s because local governments establish levies – which represent the total they aim to collect – and then that amount is split among taxpayers. If one group – such as those that own business equipment – is eliminated, then others pay more.

LSA estimates the shift in this case could mean the owners of so-called real property – which includes homes, buildings and land – would pay about $375 million more annually. Homeowners would be the largest single class of property owners to pay more.

The total shift would be higher but the state has limited property tax bills. So as tax bills increase, more property owners would hit the cap, reducing revenue to local governments.

Replacing revenue with income taxes would mean significantly higher rates in some counties.

Pence has not advocated any way to replace revenue lost if the personal property tax is eliminated, but in similar situations, policy makers have turned to the local income tax as a makeup option.

The LSA report finds that to fully replace the lost revenue, counties would need to boost their income tax rates by an average of 0.77 percentage points – but the amount varies widely.

In Brown County, it would take an income tax increase of just .10 percentage points (about $75 a year for a family with income of $75,000) compared to a 2.78 percentage point increase in Spencer County (an increase of $2,085 for the same family).

The combination of tax caps and the elimination of the personal property tax means local government would lose about $554 million annually.

Without other changes or replacement revenue, cities and towns would be hit hardest by the elimination of the personal property tax, with about $175 million in total losses, according to the report.

Schools would also be big losers – about $151 million.

Additionally, tax increment finance districts – often calls TIFs – would lose significant revenue. Those districts are set up to capture tax revenue to use for special projects, usually to pay off bonds associated with construction or infrastructure improvements.

Pence has said repeatedly that he doesn’t want to “unduly” burden local governments. And he’s proposed a phase-out of the tax so the impact doesn’t hit at once.

“We will work to empower communities and local governments in this process,” Pence said. “Time and economic growth should be our friends here, making it possible to phase out the tax while protecting local governments.”

But key fiscal leaders – including Senate Appropriations Chairman Luke Kenley, R-Noblesville – have said there are significant issues lawmakers must tackle. Among them is how to make up the revenue – and who should do so.

Kenley said a key decision is whether businesses that are benefitting from the elimination of the personal property tax should be the ones who pay, rather than shifting the burden to individuals.

That could require creating a new tax, something the LSA report doesn’t address.

Lesley Weidenbener is executive editor of TheStatehouseFile.com, a news website powered by Franklin College journalism students.

IS IT TRUE December 26, 2013

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Mole #3 Nostradamus of Local Politics
Mole #3 Nostradamus of Local Politics

IS IT TRUE December 26, 2013

IS IT TRUE that Vanderburgh County Republican Party Chairman Wayne Parke took an opportunity that we at the CCO left open regarding keeping elected officials who are essentially lifetime politicians from running for office again to challenge our assertion?…that this came after someone wanted to know what we would have to say about a politician that has a high job approval rating?…our response was pretty much that an approval rating of over 60% for an incumbent may just merit an exception to the “toss the retreads out” theory?…Mr. Parke claimed that Republican Evansville Mayor Lloyd Winnecke has a current approval rating above 60% and asked if we would make an exception for Mayor Winnecke?…our response was and is yes if the poll was done by a 3rd party and the makeup of those polled reflects and accurate assessment of the general population?…we have offered to publish the poll that Mr. Parke is referring to without edit, opinion, or bias and we will most certainly do so?…we would remind Mr. Parke that back in 2007 then Mayor Weinzapfel had an approval rating above 60% and actually defeated Republican non-candidate David Nixon by a margin of 85 – 15?…it seems as though second terms and hubris are the undoing of many politicians from Tricky Dick Nixon, to former Mayor Weinzapfel, and to the current President of the United States?…we would like to know what Mr. Parke thinks about the once very highly approved President Obama a scant 13 months since he was re-elected and how that could easily parallel Evansville politics?

IS IT TRUE a shareholder of Old National Bank who is not exactly thrilled about the proposed $14 Million investment that the bank is contemplating in the downtown convention hotel?…this person asked us to remind our readers that ONB has 100.69 million outstanding shares that sell for about $15.75 each?…that would mean that a $14 Million investment by this publicly traded bank would represent roughly 14 cents for each outstanding share or 1% of the value of each share?…that amounts to just under half of the dividend that each share pays annually?…ONB during the last five years has traded as high as $18.16 per share and as low as $9.22 per share?…one thing for sure is that a $14 Million investment of shareholder dollars is certainly something that ONB can afford to do but it is not a trivial amount when compared to annual earnings or the scheduled dividend?…none of the shareholders who have spoken with the CCO would accept their dividends in shares or warrants in a downtown convention hotel in Evansville?

IS IT TRUE that for a city that touts itself as a burgeoning tourist destination Evansville on Christmas Day is not an inviting place to look for an open restaurant?…of course there are scattered Chinese Buffets and a few other restaurants that had limited hours?…this is not any way to capture tourism or even people who are already tired of turkey to come to town for the Holidays?…while the CCO understands that restaurant workers do not wish to work on Christmas we also know that cities that have real tourism find ways to deal with this?…of the two restaurants that one visitor ate at today the food was mediocre and the service was even worse with the wait staff openly grousing in front of customers that they should not be working?…this shortcoming made a real impression?…the state law forbidding the sale of even so much as a glass of wine on Christmas drew a comment overheard to the extent of “you Hoosiers do know it is 2013 don’t you?”… in all seriousness this is a problem for people in town for anything other than a family gathering that lasts 24 hours?

IS IT TRUE during the final 5 IS IT TRUE columns of 2013 the CCO will begin to articulate some things that we hope to see happen in 2014 to make Evansville a better place to live and a more worthy place to visit?…the first of which is of course a new MASTER PLAN to replace the woefully obsolete thing that DMD claims is a fine plan in need of an update?…that is about as observant as if American Airlines said the Wright Brothers plane needs to be updates for passenger service?

IS IT TRUE Christmas Day 2013

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IS IT TRUE we wish all of our faithful readership a wonderful and inspiring Christmas Day and will rest our constructive criticisms on this most special day.

The City County Observer

EPD Activity Report December 24, 2013

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EPD PATCH 2012

EPD Activity Report December 24, 2013

Southern Indiana commercial litigator to assume top spot in DTCI

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by: Marilyn Odendahl of  TheindianaLawer.com

Evansville attorney Jim Johnson always wanted to be a lawyer, but he did not always want to be a leader.

The litigator will become the president of the Defense Trial Counsel of Indiana at the start of 2014. He will guide the organization as it works on a long-range plan with the goal of remaining responsive to members’ needs as well as adapting to changes in legal work.

Johnson is excited about assuming the top job although he admits he had to adjust to the idea of leading a statewide organization.

james johnsonJohnson

A longtime member of DTCI, he stepped away from the board in 2004 because he was not sure he was ready or mature enough to handle a leadership position. He rejoined the board in 2008 and began the move toward the presidency.

“I just thought I was ready to give back to the profession,” Johnson said, quickly adding that reason sounds like such a cliché. “I was just ready to become more involved.”

Within the legal community, Johnson is described as a “well respected member of the bar” and a “very effective advocate.” While he may have harbored doubts at one time, DTCI treasurer Michele Bryant has confidence in his abilities.

“I think Jim will do a fantastic job as president,” said Bryant, partner at Kahn Dees Donovan & Kahn LLP in Evansville.

Even while he was not on the board, Johnson was still involved with DTCI. He served for 10 years as chair of the Amicus Committee, a position that combined his interests in appellate work and legal writing. He headed up the process of determining in which cases DTCI would file a brief and soliciting other attorneys to do the writing. He said the work was collaborative and discussions were focused solely on the law, not on the politics.

johnson-facts.jpgJohnson shied away from calling the committee’s efforts a success but he did note that many times the courts would rule in favor of the position DTCI had advocated.

Born and raised in a blue-collar family in Evansville, Johnson earned his bachelor of science degree at Florida State University and his law degree at Indiana University Robert H. McKinney School of Law. He first practiced at Matchett and Thopy in Shelbyville before returning to his hometown and joining the firm that is now Randolph Fine Porter & Johnson LLP.

He has always been a litigator, cutting his teeth on insurance defense for more than 10 years before morphing into commercial litigation. Johnson’s attraction to appellate work developed early in his career. He liked what he called the purity and intimacy of working through the briefs and the challenge of presenting oral arguments.

Outside of the office, Johnson serves on the board of directors of the Ronald McDonald House Charities of the Ohio Valley. There, he not only lends his legal expertise to the organization but also volunteers regularly at the house.

Jeremy Evans, the charity’s executive director, described Johnson as being deeply and personally connected to the charity and bringing a wealth of knowledge to the board. Seeing his work on the board gave Evans confidence that Johnson will do well leading DTCI.

“Jim’s good humor, loyalty and leadership are a valued asset to our charity, and I feel certain that he’ll be of immense value as the president of the Defense Trial Counsel of Indiana,” Evans said.

Unemployment rate drops; private sector jobs jump

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By Lesley Weidenbener
TheStatehouseFile.com

INDIANAPOLIS – The state’s unemployment rate dropped again in November as Indiana gained more private sector jobs than any other state in the nation.

state’s rate of 7.3 percent is still higher than the national rate of 7 percent but lower than any of Indiana’s neighbors.

unemployment chart Nov 2013

 

Indiana added 25,300 jobs, the largest one-month increase for the state on record, with gains in trade and transportation, construction, manufacturing and professional and business sectors.

The jobs report came even as the state’s fiscal leaders heard an economic forecast that projected tax receipts will be lower than expected through June 30, 2015.

Still, Gov. Mike Pence said the jobs numbers “are welcome news to every Hoosier and are a testament to the hard working people of our state and the businesses that power Indiana’s economy every day.

“The continued downward trend in unemployment and the significant growth in private sector jobs demonstrate that Indiana’s economy is strong and growing stronger every day,” he said.

But House Minority Leader Scott Pelath, D-Michigan City, said the jobs numbers don’t mean much if income is not also rising. Currently, Indiana trails the nation in per-capita income and the gap has ben growing.

“There should be no shock to see the state’s unemployment numbers going down as we head into a holiday season,” Pelath said. “Indiana’s largest employer is Walmart.  It should be obvious and predictable that our biggest gains would be in the service sector.”

“I am glad that there are more folks able to pick up work around the holidays,” he said. “But I’m sure we also can agree that this is not a path to prosperity.”

The state’s unemployment rate has dropped significantly throughout this year. Just last summer, 8.5 percent of Hoosiers were unemployed.

“It is encouraging that fewer Hoosiers are unemployed than in November of 2008, and the unemployment rate has dropped by more than a percentage point over the past few months,” said Scott Sanders, commissioner of the Indiana Department of Workforce Development. “However, we need to keep the ball moving by strengthening Indiana’s pro-growth climate.”

Lesley Weidenbener is executive editor of TheStatehouseFile.com, a news website powered by Franklin 

Washing machines can’t save your life

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Rick Peltier

My world came crashing down on me the weekend before Thanksgiving. My wife and I were washing clothes and the unthinkable happened — our washing machine stopped working during mid-wash. Can you believe that!? Luckily, we were done washing our clothes and just had some blankets in there, but “oh, the humanity!”

“Why does this happen to me?” I cried out. “I don’t have any luck,” I added. This tirade went on for about five to ten more minutes and then I came to my senses.

The 30,000 children we treat at St. Mary’s every year aren’t worried about a broken washing machine. In fact, that’s the least of their worries and certainly the least of their parents’ worries.

Most of these children are seeking help — help to learn how to do simple things we all take for granted every day, like chewing and swallowing food. The talented staff in our Pediatric Feeding Clinic, one of only three of its kind in the entire nation, helps children learn how to eat every day. Washing machines can’t do that.

The skilled and caring psychologists at the St. Mary’s Center for Children see kids every day with autism spectrum disorder, behavioral disorders and feeding disorders. The last time I checked, a washing machine can’t help with this either.

The St. Mary’s Mobile Dental Clinic for Kids serves 3,800 children every year and for most of these kiddos, it’s the first time they’ve ever seen a dentist. Our gifted Pediatric Dentists and Dental Hygienists take a mouth full of decayed teeth and transform it into a pearly-white smile. I don’t think a washing machine can fill a cavity or extract a tooth.

Frustration turned into embarrassment, as I quickly realized I was complaining about nothing. My wife and I have a healthy 20-month-old little girl who feeds herself at every meal and doesn’t need assistance eating. We’re able to afford the food and clothing we need to survive. And, we have a roof over our heads every night we go to bed.

We also found a good deal on a new washing machine, but that just doesn’t seem to matter much anymore.

I know what’s important in life, but I’m only human. And, as imperfect humans, we all tend to worry about meaningless things every day. This won’t be the last time I get upset over something that means so little in the grand scheme of life. But, I know what truly matters. And, I know you all do, too.

So, as we open presents under our Christmas trees this year and watch the joy and excitement on our children’s faces when they un-wrap a new Wii, an iPad or an iPhone, please remember the children and families who can’t afford to celebrate Christmas. Please remember the kids spending Christmas in the hospital fighting for their lives. Please remember the families we serve every day who can’t afford to pay for their

healthcare. And, please remember to count your Blessings, as I have learned, once again, this year.

Washing machines come and go. Washing machines can be replaced. True family and friends are forever. And, if you have that, then I think you’re pretty lucky.

Merry Christmas and Happy New Year! God Bless,

Rick Peltier
Director of Foundation Operations
St. Mary’s Medical Center and St. Mary’s Warrick Hospital

Local apartment complex brings Christmas to children at St. Mary’s

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Abbey Court Apartments in Evansville partnered with the St. Mary’s Medical Center Foundation and the St. Mary’s Center for Children to help brighten the spirits of local children this holiday season.

Abbey Court Apartments and their parent corporation, Samaritan Companies in Indianapolis, conduct a toy drive every year and generously give the donated toys to a local non-profit organization during Christmas time. On Monday, December 9th, Santa Claus, along with elves from Abbey Court and Samaritan Companies, delivered these toys to children receiving care at St. Mary’s Center for Children.

Abbey Court Apartments and Samaritan Companies collected $7,500 worth of toys, which included legos, Barbies and stockings full of more toys and candy. They also gave the kids sports jerseys, pillows and blankets. And, there was Yoo-hoo, water and Christmas cookies for everyone to enjoy after sitting on Santa’s lap.

“We love doing this for the kids,” said Teresa Sturdivant, Regional Director of Samaritan Companies. “I love to see the smiles on their faces. That’s what makes this toy drive worth it each and every year.”

“911 Gives Hope always does such a great job of distributing toys to kids who are hospitalized during the Christmas season,” said Rick Peltier, Director of St. Mary’s Foundation Operations. “This year, thanks to the generosity of Abbey Court and Samaritan Companies, we were also able to donate toys to kids who visit us on an outpatient basis.”

Abbey Court and Samaritan Companies also delivered toys to children on St. Mary’s Pediatric Unit and dropped off toys at the Ronald McDonald House and Easter Seals Rehabilitation Center in Evansville.

More public schools graded As, fewer get Fs

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By Lesley Weidenbener
TheStatehouseFile.com

INDIANAPOLIS – More Indiana public schools received As this year and fewer received Fs under grades the Indiana State Board of Education approved Friday after months of political wrangling over the system.

2013 A-F grades graphic - imageAmong the Fs was a charter school that received a controversial A rating last year after former State Superintendent Tony Bennett ordered changes to the formula. School officials on Friday blamed ISTEP problems for the grade change.

Christel House Academy in Indianapolis is among 106 public schools in Indiana that received failing grades under the system, which has been roundly criticized by educators and lawmakers alike. That’s a drop from 136 public school Fs issued last year.

The grading formula is set to change next year – with more emphasis put on individual student growth rather than overall achievement – although policymakers haven’t finished working on the new criteria.

For now, though, the State Board of Education was stuck approving grades under the old formula, which also produced 805 As, 382 Bs, 332 Cs and 195 Ds among public schools.

Last year, only 671 public schools received As, according to the Department of Education.

State Superintendent Glenda Ritz said Friday that many public schools had big changes in their grades - some better, some worse - and that's a fault with the current A-F grading model. Photo by Lesley Weidenbener, TheStatehouseFile.com

State Superintendent Glenda Ritz said Friday that many public schools had big changes in their grades – some better, some worse – and that’s a fault with the current A-F grading model. Photo by Lesley Weidenbener, TheStatehouseFile.com

“Though this current model for calculating school accountability grades will be changing, the data does show that some great learning is occurring in our schools, and I want to congratulate our students for their successes,” sate Superintendent of Public Instruction Glenda Ritz said in a statement about the grades.

Only board member Andrea Neal voted against the grade placements. She said the formula applies a one-size-fits-all system that fails to encourage schools to offer a well-rounded education to all students.

“To get an A, schools know what they have to do,” which involves focusing on reading, math and standardized testing, Neal said. “In some cases, this is happening to the exclusion of all else,” including the arts.

The board also approved grade placements for private schools. When those grades are added, the total number of schools receiving As increases to 938. The total number of all schools with Bs is 451, the number with Cs is 372, with Ds is 209 and Fs is 112, according to the Department of Education.

Many schools saw their grades change – some for the better and others for worse. Wood Memorial Junior High in Gibson County moved from an F last year to a B this year, while just down the road, Princeton Middle School moved from a D to an A. Two Mississinewa schools also moved from Ds to As as did Knightstown Elementary in Henry County. There were dozens of other examples.

But the Indiana Math & Science Academy dropped from a B to an F and the Padua Academy dropped from an A to an F.

Ritz said such dramatic changes in grades expose one of the problems with the current A-F grading system. She said because the grades are based on a four-point scale, small changes in scores or graduation rates can make big differences in the final categories.

The new system – to be implemented with next year’s grades – is to be based on a 100-point scale, which Ritz said should better represent how a school is actually doing year to year.

“A good system will show that you have a school improving or you have a school not improving – but not extremes like you’re seeing in the current model,” Ritz said.

At Christel House – which had received As for years and which Bennett had lauded as an example of a successful charter school – the grade plummeted largely due to lower ISTEP scores, said Daniel Altman, a spokesman for the Department of Education.

The school blamed the poor scores on problems with the ISTEP test last spring. Server failures at the company that administers the online testing program led many students to be kicked out of the system in the middle of the exams.

Christel House officials said 270 of its 294 students were prevented from successfully completing the online test.

“We appealed our grade based on the tremendously disruptive ISTEP+ testing problems that occurred with the online test.  We believe these disruptions fatally flawed the results,” said Christel House Academy Principal Carey Dahncke.  “We believe this inaccurately represents the performance of our students and teachers.”

An independent study found that, overall, the ISTEP results were valid, although some individual scores were nullified. DOE officials said they received a number of appeals based on ISTEP tests but did not grant any of them.

Christel House is under special scrutiny because last year it was set to receive a C under the grading formula. But emails uncovered during the summer by the Associated Press showed that Bennett asked for changes in the grading formula that benefitted Christel House and more than a hundred other schools. The changes raised the Christel House grade to an A.

The revelations about Bennett’s actions led him to resign from his post as the education chief in Florida, where the Republican moved after he was defeated in his reelection bid by Ritz. Later, a bipartisan study found that the changes made by Bennett were “plausible.”

The Board of Education approved the grades Friday after brief discussions and questions, without any of the rancor that has marked recent meetings.

Board members – who have all been appointed by Republican governors – have been critical of Ritz and the Department of Education she oversees for failing to get information to schools and the final grades finished more quickly.

Ritz has blamed the ISTEP problems for some of the problems. But at the request of skeptical board members, the nonpartisan Legislative Services Agency ran the data through the grading formula as well to serve as a check against the DOE results.

DOE officials on Friday said the results were the same in most cases. Where problems cropped up, LSA and DOE officials were able to work out the differences.

Still, board member Dan Elsener said that next year, education officials should strive to finish the appeals process more quickly so that schools know before the board votes what the final grades will be.

Lesley Weidenbener is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.

EVSC Schools in Need of Dramatic Improvement Just to Attain Mediocrity

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Dunce

The Evansville Vanderburgh School Corp. received nine failing school accountability grades from the Indiana Department of Education, compared to the 15 “Fs” the district received the previous school year. Five EVSC schools were awarded “A” grades. Eight schools received “Bs,” nine “Cs” and four “Ds.” When taking these grades and calculating the GPA (grade point average) for the EVSC the GPA computes to an academic probation level of 1.88

The EVSC schools that got an A were Cynthia Heights Elementary, Highland Elementary, Oak Hill School, Scott School and Tekoppel Elementary.

EVSC’s Glenwood Leadership Academy, which could be in danger of state takeover and was also expected to be a topic of discussion at the board meeting, received its seventh ‘F” in a row proving once and for all that naming a failing school after an elite prep school does not make it an elite prep school.

Other EVSC schools that received failing grades were the Academy for Innovative Studies, Caze Elementary, Dexter Elementary, Evans School, Lincoln School, Lodge Community School, McGary Middle School and Washington Middle School.

The Catholic schools fared much better with both Memorial and Mater Dei getting A’s to lead the diocese schools to a composite GPA of 3.38

Warrick County did even better with a grade card loaded with A’s and a composite score of 3.68

It seemed like the further one got from downtown Evansville the better the scores got with both the EVSC and the other metro area counties culminating in the North Posey District seeing every school get an A for a perfect 4.0.

In the world of private and magnet schools Signature School that is a perennial top ten program in the country, Evansville Christian School, and Evansville Day School all received an A. The Joshua Academy was the lone exception scoring a D.

The other takeaway is that the spending per pupil in the EVSC is significantly higher than it is in any of the other programs proving again that you can’t fix education problems by throwing money at a failing system.

Overall with scores like this the EVSC seems to need to wear a dunce cap while standing in the corner waiting for a good old fashioned spanking. The truly disgusting part of the EVSC’s 1.88 grade is the positive spin that is put onto what is clearly a system that needs to improve to even call itself mediocre. The EVSC like many of the local government entities and affiliates will continue to fail as long as unacceptable performance is celebrated publicly. IS IT TRUE it is time for the EVSC to take a trip to the woodshed.

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