FORT WAYNE — Even as Fort Wayne Controller Pat Roller warned the City Council about looming financial problems, experts from across the state said the city is in an enviable position compared with many other Hoosier communities.
Members of the city’s fiscal policy team lauded city officials for taking a long-term look at how best to finance its operations. While the city has burned through millions of dollars of its cash reserves recently, it built enough of a cushion to last until at least 2014, Roller said.
“At some point, you’ve got to do something,” said John Stafford, director of the Community Research Institute at IPFW. “But you do have some time, and you do have a number of options.”
Stafford serves on the fiscal team, along with Roller; the three at-large council members; Larry DeBoer, a professor of agricultural economics at Purdue University; and William Sheldrake, the president and chief executive officer of Policy Analytics. Sheldrake’s company touts itself as an Indiana business “specializing in economic research, public finance, and policy analysis.”
Roller has criticized property tax caps for hampering the city’s budget, but Fort Wayne has not been hurt nearly as bad as other communities. The city lost nearly 15 percent of its property tax revenues to the caps, according to a presentation by Stafford, but Anderson lost 40 percent of its revenues and Gary lost more than half.
One of the reasons the hit was less locally is that Fort Wayne took steps in previous decades to diversify its tax base – adding two types of income tax, for example. Gary has no local income tax. Fort Wayne also underwent an aggressive annexation effort from 1989 to the annexation of much of Aboite Township in 2006.
The city’s position of population dominance in the county also gives it unique options. Because the vast majority of Allen County residents live in Fort Wayne, state law grants the City Council the power to set income tax rates countywide. This means the council can set rates for people it doesn’t directly represent, a point of contention with some Allen County officials.
Even so, several members of the City Council said they would want to include other government officials in the discussions about changing tax rates. Inviting other governments to the table would not only give them input into the decision – although no actual authority – but possibly allow the city to share in the political heat depending on what decision is made.
Those decisions will not come from any recommendations from the fiscal group. Its members made clear their role was to share options and information, but it was up to the council to make actual decisions. Even Mayor Tom Henry has no formal role, as he cannot veto a vote of the council in its role of setting income taxes.
“Policy is really in the purview of the elected officials,” Stafford said.
Councilman John Crawford, R-at large, said council members will have to determine what the proper mix of taxes is based on their personal philosophies. He said he anticipates changes being made, but he personally supports using available cash for as long as possible to ride out the slow economic recovery.
Regardless of what happens, members of the fiscal team lauded the city for taking an approach to look at its policy long before finances become a crisis.