Friday, January 11, 2008

Referendum Discussed at State Legislature Hearing in Fort Wayne

Last Wednesday the Indiana House Ways and Means Committee held a hearing here in Fort Wayne to get input from public officials and citizens on the issue of property taxes. Evert Mol, leader of the successful FWCS facilities project remonstrance, spoke before the committee about the need for a referendum process. His remarks are transcribed below:
Last year Fort Wayne saw why we’re unable to slow the rise in property taxes in spite of taxpayer opposition. In February, in a process similar to the one that played out in Indianapolis a few years ago, our school board by a 6 to 1 margin approved a $500 MM bond issue for a capital project. In June that project was defeated in a remonstrance by a margin of 7 to 2. How could a board elected to represent the interests of taxpayers as well as the schools misjudge taxpayer sentiments by that much?

One reason is that the public meetings and hearings before the February vote were designed to sell the project, not to listen to objections from taxpayers. But in any case the only way to really know what taxpayers think is to allow them to vote. Lacking requirements for a ballot referendum, we had to initiate and conduct a remonstrance, a massive petition drive, to give taxpayers that voice. Without a remonstrance, taxpayer objections would not have mattered and property taxes, already set to increase by an average of 15%, would have gone up another 20% over the next 5 years. In a city the size of Fort Wayne a remonstrance is an expensive and time consuming proposition. It’s an undue burden for taxpayers. Last year’s change in the law allowing all registered voters to participate will make the process even more daunting next time.

Although this particular project triggered a remonstrance process which seems to be designed to discourage opposition, many projects go unchallenged and the taxpayers have no voice. Who would go to all that trouble for smaller projects, say $50 MM or $20 MM even if they weren’t justified, knowing that the winning the remonstrance doesn’t even stop the project, but merely delays it for a year. Yes, the new proposal is supposed to be “substantially different” but how do you define and enforce that requirement except through the courts?

Construction projects are a major factor in rising taxes. Elected officials have repeatedly shown they are unwilling to stop them or scale them back, so taxpayers need a viable means to vote on them. A petition drive is not a viable means for most taxpayers. They need to be able to vote on projects in a ballot referendum as the governor has proposed. Yes, that forces the taxing entity to work harder on their costs and justification. But it will not mean, as Senator Kenly told me, that “nothing will pass”. In fact the success rate in states with referendums is higher than it is in Indiana with remonstrances.

The Governor called the remonstrance process “klutzy”. Having done one in a large city, I think “insane” is a better word. No other state forces its taxpayers to do this. It’s time Indiana joins them.

Evert Mol
Fort Wayne


Robert Enders said...

Here is one reason why a project is more likely to pass a referendum than a remonstrance:
Only property owners can sign a remonstrance. My hunch is that non-property owners who do not DIRECTLY pay property taxes will be more likely to support a spending project.

Code Blue Schools said...

The law was amended last year to also allow registered voters to sign petitions afters renters sued and won in the Indiana Supreme Court. That makes petition drives even more difficult.