Mortgaging Our Civic Future

You’d think Indianapolis lawmakers might have learned something from the Goldsmith Administration. (For those of you new to Indy or too young to recall, Goldsmith was blessed with a growing national economy and low interest rates, and he was able to avoid raising taxes by using the municipal credit card–refinancing everything in sight, and incurring lots of additional debt, all of which  we’re still paying off. )

The lesson isn’t that cities should never incur debt. There are all sorts of reasons–good reasons–to bond for civic improvements. Think bridges, sewer systems, public buildings. As with so many issues in public administration, the issue isn’t whether to do something, it is under what circumstances and how.

Right now, the Mayor and Council are arguing about the Mayor’s proposal to issue thirty-year bonds for “Rebuild Indy II.”  The City–that’s us, the taxpayers–would essentially be taking out a 30-year mortgage on an asset with at most a 10 year life.

That is profoundly stupid.

Think about your house. You may have a loan with a twenty or thirty year term, but at the end of that period, the house will be yours and it will still be standing. If historical trends persist, and you’ve taken care of it, the house will be worth more than you paid for it. That mortgage was for an investment, and it made sense.

Would you take out a 30-year loan to purchase a tent? How about a car? Why not? Because the tent and the car depreciate. Those aren’t investments, they are consumer goods.

Paving city streets is maintenance.

Do our streets need paving? Are you kidding? Of course. Should tax dollars pay for that maintenance? Absolutely.

But a 30-year loan for maintenance that has to be redone every few years?

That’s like taking out a mortgage to pay the plumber for fixing your toilet.

6 Comments

  1. I do not travel around the city; I stick to the east/northeast side of town. I have noticed pockets of infrastructure repair going on – and on, and on, and on – with little being done over long periods of time. This makes it appear as if the current administration is doing much to maintain city infrastructure when, in fact, they are patching some holes and ignoring huge areas in need of major repair city-wide. I will only mention in passing the numerous beautifully, and expensively, maintained sports venues. Ballard’s outrageously stupid comment that Democrats are “demeaning minorities” with their “cricket-proof” comparison regarding much needed infrastructure repair/maintence county-wide, shows his demeaning attitude regarding upgrading the worst areas in the city. He went to India, enjoyed a cricket match then returned to Indianapolis and within a brief period of time we have a beautiful new cricket park – in an area in need of infrastructure maintenace and repair. He probably doesn’t think we remember the speed with which he accomplished this useless fulfillment of HIS dream – or is a money-making scheme in some way.

    The Goldsmith administration had a propensity for awarding business contracts (at times work with no contract) and selling properties to cities in Ohio thanks to his chief financial advisor (and contributor) who was vice president of a bank in Columbus, Ohio, and an employee of the City of Indianapolis in more than one position at the same time. I thought his goal was to eventually annex Indianapolis into Ohio. Growing up in the Riverside/Victory Field area, bus trips to downtown were via Indiana Avenue so I am very familiar with what that neighborhood was like for many decades. When revitalizing Indiana Avenue began; I knew it was one of his few forward movements to better this city. But…one insance has stuck in my mind since 1992 – 1993; the sale of fifteen pieces of property on Indiana Avenue to a contractor from Hamilton, Ohio, for $82,000. What is that worth today and who benefited by this renovation? These properties had been given to the city by Beurt Ser Vaas during the Hudnut administation. Goldsmith’s outsourcing didn’t have the reach that Ballard’s appears to have but it began the downslide of this city into privately owned companies who benefit from our tax dollars. The Council Democrats referred to the need of street repair and more cops on our streets in the Star article ths morning. Keep track of our crime rate, a touchy subject for me after being mugged on my driveway at 11:00 in the morning by a pair of criminals who were supposedly being followed by undercover IMPD officers since four days before (this information is in court documents). Notice the bouncy, rough ride over most streets and watch for cracks and fissures in sidewalks as you walk in your nighborhoods. Ask yourself if this city, under Ballard’s control, isn’t demeaning minorities to make this city appear to be a sports center in the country. Where do you want your tax dollars to go, who do you want them to benefit, protect and educate?

  2. One of Goldsmith’s boondoggles was refinancing expiring water and sewer bonds and spending the proceeds for maintenance projects. More than stupid.

  3. Rebuild Indy II is not just about repaving streets (although roads are an important investment). It also addresses bridges, sewers, and public buildings and parks built to last at least 30 to 50 years. These are long-term investments in our community. The City must fund such important infrastructure, which — with proper maintenance — will outlast all of us reading here. If that requires borrowing to accomplish the goal, then the City should listen to its Democratic councillors, who have proposed a shorter-term note and more equitable impact of the funds throughout Indianapolis.

  4. Remember when both business and government were measured by growth, improvement, customer and employee satisfaction? That vision is what we’ve been robbed of by the belief that mediocrity is the best that we can do and cheap is the best way to achieve it.

  5. Pete gets it: What difference would it make to any of us if CC taxes were $100.00 more? None would miss a meal. But the GOP wants to starve the beast. The starving beast leaves you replacing a tire every six months at a cost of $500.00. (If you’re lucky) Good business for Discount tires. But who among us can do the math? Nothing will change until we wake up and throw them out. Why? Because they simply can’t do the math! We need far less math/art/science/law majors and more plumbers and electricians as legislators. Just as Emerson implied: Craftsman know what they are doing.

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