PILOT Error
In the immortal words of my late grandfather, Indianapolis City-County Council Vice-President Brian Mahern has lost his natural mind.
I figured he was never the sharpest political tool in the shed, only the loudest and my belief was re-affirmed this afternoon. In another one of his publicity seeking news conferences, Mahern called for the city to levy a PILOT against the Capitol Improvement Board as an alternative to the city phasing out the the county homestead credit for property taxpayers who haven’t reached the one-percent tax cap. By the way, the state got rid of this a few years back once the tax caps were in place.
A PILOT is “payment in lieu of taxes” that is usually levied against entities that don’t pay property taxes, for example Citzens Gas. Mahern tells the Indianapolis Star that such a move would cover the $8.1 million that would come from the elimination of the homestead credit. There are a few problems with this logic.
First, the CIB already passed its budget, which by the way City-County Council President Maggie Lewis is on the Board, so Mahern’s move undermines his own leader, also since the budget has been approved by the board there is a legal question of to what extent can the Council modify it.
Second, any PILOT would have to be adopted by ordinance (which we know the and it’s unclear if the amount collected would be $8.1 million. Here’s why. Under Indiana law…
The PILOTS must be calculated so that the PILOTS may be in any amount that does not exceed the amount of property taxes that would have been levied by the legislative body for the consolidated city and county upon the tangible property described in subsection (e) if the property were not subject to an exemption from property taxation.
So what are the values of Lucas Oil, Banker’s Life, Victory Field and the Convention Center? And why stop there. There are a lot of entities that don’t pay property taxes. The State of Indiana, IUPUI, Butler, UIndy, Ivy Tech, the Center Township Trustee’s Office, a lot of not-for profits, etc. Do we charge all these entities as well? We should, if we want to be fair, right?
And speaking of fairness, Mahern says he wants to create a “Tax Fairness Task Force” where not-for profits would “voluntarily” pay PILOTs. What crack pipe is he smoking? What entity is going to “voluntarily” fork over more money to any government?
There are a lot of more thoughtful ideas Mahern could have come up with to address the city’s financial shortfall, but the problem is they are thoughtful and they don’t allow you to be a media slut.*
I’m not sure who has the better to phrase this silly idea. The Mayor’s Office…
“Today’s latest news conference from Councillor Mahern underscores his lack of knowledge concerning municipal finance. Continuing the homestead subsidy would cost $13 million, not $8 million. It also would create a $13 million funding cliff that would put Indianapolis into a deeper fiscal hole in 2014 and beyond. This knee-jerk proposal continues the same line of thinking that nearly bankrupted the Capital Improvement Board and produced fiscally irresponsible city budgets a few years ago. Mayor Ballard looks forward to having a serious discussion about the long-term fiscal needs of our city with thoughtful leaders in the Council, including President Maggie Lewis, who just yesterday as a member of the CIB voted to approve its budget.”
Or my late grandfather…
“What a dumb ass!”
* For the record, I am a media whore because I get paid for what I do. Mahern does his for free so he can run for Mayor in 2015 and lose in the primary. And also for the record, I am not saying anything that 90% of all Republicans and DEMOCRATS in this town’s political aren’t already thinking. You know I’m right.
