Comprehensive Planning – A Road Less Traveled…

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Last night the Council considered Bill No. G-16-05-27 which is an ordinance which created a Motor Vehicle Excise Surtax and Wheel Tax. The bill passed through committee with a 5-4 recommendation in favor. The proposal was advanced by some members of the Mayor’s Fiscal Policy Group which had apparently identified a shortage of road funding as its number 1 priority. In addition to the Mayor’s citizen appointments, Councilmen Arp, Crawford, Jehl and Paddock participate on that committee.

Some mixed messages were received regarding whether the proposed ordinance was an official recommendation from the Mayor’s Fiscal Policy Group or whether the proposal was made as an alternative to generate revenue for the City in light of the failed attempt at annexation.  A statement from the Mayor’s Public Information Officer indicated the latter. While Councilman Paddock agreed with the Mayor’s statement and Dr. Crawford did not, both were supportive of the proposal (ultimately, Councilmen Arp and Jehl dissented from the recommendation).

In the weeks that followed the introduction of the ordinance, I attempted to undergo a crash course on the predicament of the City’s road funding, including Council’s attempt in 2013 to address a significant backlog in road funding with a thirty million dollar bond. Due to a multitude of variables, not the least of which was an increase in costs associated with the asphalt and concrete, it became apparent that both the bond and the traditional funding of roads from the yearly budget was not sufficient to address the ongoing disrepair of the roads.

It should be noted that the City operates under a budget that was prepared in the Fall of 2015 – before I took office (with Councilmen Arp, Ensley and Freistroffer) for the first time this year. In other words, I was presented with a request to enact a tax before ever undergoing a budget review – or even undertaking a global or comprehensive review of our government spending. In voting against the bill, I was not about to presuppose that City Council would be unable to remedy the approximately $4.5 million shortfall (or the amount to be raised by the wheel tax) out of the $192 million of revenue brought in each year. Especially when a practical solution still exists which offers this new Council the opportunity to undergo such an analysis while immediately increasing our road funding.

Senate Enrolled Act 67 (2016) provided the City of Fort Wayne with a “one-time LOIT distribution” of approximately $8.3 million of which at least 75% (or $6.2 million) is required to be used for road repairs. The City Controller, Len Poehler, made the decision to allocate those funds towards future projects for which the City could apply to the State and compete with other cities for matching funds from the Local Road and Bridge Matching Grant Fund created under HEA 1001 (2016). Because of the many variables and hurdles involved with that evolving fund, it is anticipated that those projects will be eligible for 50/50 matching funds up to $1 million in future years. (Click here fore a good summary). While I appreciate the Controller’s logic save the LOIT distribution, I do not believe it reflects the best way to address our road funding issues.

During the council meeting I expressed my concerns regarding the decision to implement a new tax for roads while simply sitting on actual road funding in the bank. Indeed, if the Wheel Tax could generate $4.5 million in 2017, the City could also earmark $4.5 million from the LOIT distribution in 2017 which would afford Council the opportunity undergo a thorough budget analysis this Fall before voting on a tax increase. The benefit of doing so would result in two potentially more positive scenarios than the current predicament without actually falling even more behind on road repairs.

First, the City could identify sufficient savings that would make the Wheel Tax unnecessary – and even provide additional money into the rainy day fund eligible for the State “match.” Alternatively, savings of a lesser amount could be identified which would provide a better estimate as to the amount of wheel tax actually needed to meet demand – as opposed to the current estimate. In my opinion, the very worst case scenario would result in enacting the very same wheel tax, but with one very important distinction: Council will have made a more thorough evaluation of the situation – something that I personally made a commitment to do when I ran for office.

One might be inclined to argue that immediately spending $4.5 from the LOIT distribution now prevents the City from a potential $4.5 “match” from the State. However, that statement is only true if the City is unable to place a total of $4.5 into a rainy day fund over the course of the four years it will take to exhaust the remaining funds from the LOIT distribution used for State matching projects. And quite frankly, if the City can’t figure out how do that, well, shame on us.

Also understand that my decision was not predicated on an assumption that City funds are currently being diverted from the budget into polarizing items such as arenas and steam parks – or even the sewer separation Long Term Control Plan which operates under a separate budget for City Utilities. And while I can appreciate the confusion of constituents regarding these complex matters of budgets, branding and bureaucracy, a realistic review of the budget will involve looking at current spending – and bigger issues. Tough issues.

Ultimately, the bottom line for me is that raising taxes, no matter how slight it may seem to some, is not a matter of first resort for me. Step one is and should always be to look internally to address issues before looking to taxpayers. Unfortunately, this time that decision appears to be the road less traveled.


Comments

  1. Michelle Roebel says:

    Thank you Michael, you summed it up beautifully. As an average taxpayer, I have noticed over the past couple years steady increases from groceries to utility bills, etc. The busniness mentality is, ‘ it isn’t much money and we will pass the cost onto the taxpayer/consumer’ and I completely understand. However, the pennies add up. Over any given month one will find a significant overall increase when you add it all together. Thus, a signifiant decrease in disposable income – if this was available to begin with – in the household budget. For those of us who already live paycheck to paycheck, we need to look further into cutting back and living with in the budget. In my case, the only thing left is food and medication. I ask the city to live within their budget as I the average tax payer.

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