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Editorials

Responsible stewards

Local taxpayers have reasons to be concerned about city finances after hearing a report on the city’s fiscal state, but the report also offers evidence that city officials have made responsible decisions that have made the situation in Fort Wayne better than in many other Hoosier cities.

The city’s fiscal working group presented an impressive amount of research to the Fort Wayne City Council last week. The group includes experts on local government finance such as John Stafford, director of the Community Research Institute at IPFW; Larry DeBoer, a professor of agricultural economics at Purdue University; and William Sheldrake, president of Policy Analytics.

Yes, the city faces budget challenges that will only become more difficult as state-mandated property tax caps reduce more revenue to cities and other local governments. Yes, the city will very likely have to raise local income taxes someday, something few citizens want.

But when looking at how Fort Wayne fares against other cities, it’s clear that local officials were good stewards of the public’s money. Years before knowing there ever would be limits on the property taxes of individual property owners, the sound decisions left Fort Wayne better positioned than many other cities.

The accompanying graph shows how tax caps – also known as circuit breakers – are limiting cities’ incomes. The higher the percentage vertically, the more a city is losing. Fort Wayne is well below South Bend, Gary, Muncie, Anderson, Hammond, Elkhart and Terre Haute in the amount of revenue lost to the caps.

The graph also shows – horizontally – the tax rates of cities. Not coincidentally, Fort Wayne is below the rates of those same cities.

The city rightly has shifted some of its revenue from property taxes to income taxes over the years, easing reliance on property taxes. The past three mayoral administrations have reduced many costs by finding efficiencies and scaling back programs. So when tax caps came, Fort Wayne was able to get by without closing fire stations or making other significant cuts in services.

The city still faces significant decisions in coming years about how much to cut spending and how much to increase taxes. But Fort Wayne has many more options than many other Hoosier cities because of good financial stewardship in the past.

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