Revenue Enhancement

A couple of days ago, a former partner of my husband copied me on a message he sent to his City-County Council representative. It began:

Today we were the recipients of an unannounced revenue enhancement effort “inspection” by a member of the Indianapolis Fire Department, acting under authority of General Ordinance #46, supposedly under the guise of State law.

The message went on to describe a Fire Department program in which individual tenants of commercial buildings were notified of an obligation to “self-inspect” their leased premises –and charged $25 each for that dubious privilege. Those failing to respond were assessed a $60 fine.

The owners of the building were not notified, despite the fact that they would seem to be the parties responsible for maintaining fire safety standards. And as the writer noted, tenant “self-inspections” are unlikely to generate confidence-producing results.

What particularly irked my correspondent–a registered architect who has to comply daily with fire safety regulations–was the fact that the building in which he has his offices is fully sprinklered, has a supervised alarm system, and is regularly inspected by the State Fire Marshall.

The purpose of these laughable “self-inspections” is rather obvious, and it isn’t fire safety. It is, as he asserted, “revenue enhancement.”

The City’s taxing authority has been constrained (unwisely, in my view, but that is a separate conversation), so it is trying to compensate by raising “fees.” The difference between a tax and a fee is that the former is levied on the population at large in order to provide services that benefit the entire citizenry; fees–at least in theory–are levied on the people benefitting from the service.

Fire safety is a good example of the elasticity of this theory. Many years ago–in colonial times, actually–fire protection was a consumer good. Fire departments (privately owned) would respond to fires at the homes of those who could afford the “insurance” they sold. That didn’t work very well, as you might imagine, and lawmakers recognized the benefits of providing “socialized” fire protection.

Thanks to America’s current hysteria over taxation, we seem to be moving back to the bad old days. Affluent neighborhoods are hiring their own “security” in the absence of adequate police protection. And now, we’re evidently going to use a “safety program” to charge commercial occupants for a portion of their fire protection.

This isn’t progress, folks.

Maybe its time for a community-wide discussion of what government is for.

9 Comments

  1. According to the news this morning, this community government is for the NFL. The glowing report of hosting the previous Super Bowl completely overlooked the financial loss this city sustained and the disclaimer “we didn’t lose as much as expected.” It also left out complaints by downtown merchants seeing far less profits than anticipated because visitors seemed to prefer shopping in outlying areas. Many of these businesses are probably paying this fee under General Ordinance #46. Well balls; no community-wide discussion on the subject at this late date will help. Maybe those $25 “fees” will help pay for the expensive bid for another Super Bowl.

    I am not a Colts fan but I still resent and am shamed by the ugliness shown by this city when the Colts lost the Super Bowl after an excellent winning season. Or maybe Ballard expects his bid to remove Homestead exemptions from property taxes to pay for this Super Bowl bid and to support the Pacers – AGAIN.

  2. “The City’s taxing authority has been constrained (unwisely, in my view, but that is a separate conversation), so it is trying to compensate by raising “fees.” ”

    I strongly agree with the article, though I strongly disagree with the above line. It’s probably a reference to the property tax caps. But the fact is the City for the last six years the Mayor has constantly proposed raising taxes and fees many of which passed. Ballard is proposing more local income tax increases and property tax increases. He’s proposed an increase in the food and beverage tax, the wheel tax, the alcohol tax, the car rental Tax, the hotel tax. And those are just the ones I can think of off the top of my head. Virtually every fee has been increased, in many cases doubled, tripled or gone even higher. For example, parking rates have doubled.

    Things have changed from when you were in city government, Sheila. The game now is to divert tax revenue, particularly property tax revenue, to appointed bodies who can dole out that money for endless corporate welfare and giveaways. Many business in Indianapolis get abatements from paying property taxes, and many that do are in TIF districts that drain away property tax revenue from basic services to go to corporate giveaways. Fully 20% of the property in Indianapolis is in a TIF district and they’re talking about creating another one off of Madison Avenue. Most TIF districts in Indianapolis run in the red, meaning the increment is insufficient to support the borrowing against the expected increment. That means the base has to be raided or general funds have to be used to pay the borrowing.

    Ballard has a $100 million annually with the property tax caps than Peterson had before the property tax problem. Our problem is not a tax revenue problem. The problem is how our tax dollars are being spent. We taxpayers have to stop being asked to subsidize the risk of private business, especially when there is no reward for doing so.

    Sorry…hope I don’t lead the discussion off track. I know you were talking about another issue.

  3. Property tax caps are meaningless with the reassessments this year; property taxes went up along with these assessments.

  4. The self-inspection program isn’t authorized by state law. As you are well aware, Indiana is not a home rule state, which means local governments have only those powers specifically bestowed upon them by the General Assembly. State law mandates that local fire departments conduct annual inspections of commercial buildings and multi-tenant residential buildings. The fire district levy is supposed to include money for fire inspections. While our City is able to spend close to $50 million to relocate the IFD headquarters, build a new downtown fire station and relocate the firefighters credit union all so a valuable city block can be given for free, along with about $6 million to a private developer who contributes generously to our may in order to redevelop it, it seems that IFD had no money to hire fire inspectors to conduct annual inspections and was inspecting only a fraction of the properties it was statutorily obligated to inspect.

    One of Ballard’s Six Sigma teams came up with the bright idea of doing what California does (a home rule state) and creating a self-inspection program for every single business right down to the single-office tenant in multi-tenant programs. The self-inspection fee is $25 regardless of the size of your business or what type of business you are operating. Of course, nobody who is not licensed to conduct fire inspections is actually qualified to complete the self-inspection report they must file under penalties of perjury, but the City figured by letting business owners know that if they didn’t comply with the self-reporting and pay the self-inspection fee, they would face an on-site inspection accompanied by an inspection fee at least double the size, along with the threat of being cited for multiple violations, they would fake their way through the report and pay up.

    When Gov. Pence took office in January, he said he was putting a moratorium on any new business regulations. I called the general counsel for the state fire prevention and building safety commission and asked her how the City of Indianapolis was able to impose this new business regulation without any state statutory authority. She promised to looked into it and discuss it with the Commission at their next board meeting. When I followed up with her, I learned that never happened and there doesn’t appear to be any sense of urgency on the part of the Commission to stop the City of Indianapolis from administering its fire safety laws in a manner not authorized by state law.

    In the meantime, we had this major fire at a commercial/warehouse facility less than a mile from Indianapolis’ downtown, the largest in many years, that spewed toxic fumes and debris into the air throughout the most populated area of the City for more than a day. It turned out that the building had no operating sprinkler system and had not been inspected for years, the last such inspection noting that the building did not have a functional sprinkler system.

    And then there’s this other dirty little secret folks don’t talk about. Most fire hydrants throughout the city lack the water pressure needed to fight any serious fires. Under the right conditions, you could have blocks and blocks of the city go up in flames and our fire department would be helpless to fight it. There are documented cases where the fire department arrived at fires helpless to put out the fire because the pressure from the hydrants were too weak and they quickly used up the water on their trucks. The fire department is left in such cases just waiting for the fire to burn itself out. Even more scary, I know of a multi-unit, wood structured, condominium project built in a heavily populated area not far from the downtown area which was built without an operating sprinkler system. That somehow slipped through the reach of city inspectors while it was under construction and the homeowners association had to spend the money to install an operating system the developer had failed to install when they discovered this fact many years after the building had been constructed and fully occupied.

  5. Oh, I should have added that our esteemed Chamber of Commerce of Greater Indianapolis was fully behind the self-inspection program. I’ve never seen a business organization anywhere that is as hostile to business interests as our local chamber of commerce. It seems to only represent businesses who make money doing business as government contractors since those are the only businesses which benefit from the policies it advocates.

  6. It is my understanding that the water company has the responsibility of inspecting all fire hydrants yearly. There are many in my eastside area that are totally rust covered; they are primarily in business areas. Two years ago my across the street neighbor had a fire in her basement; neither hydrant on our street worked, several fire units had to hook hoses together and go almost three blocks to a working hydrant. Meanwhile, the fire raged on, doing extensive damage. Who is responsible for maintaining hydrants and who is responsible for making those responsible do their job? Or is this too confusing an issue for elected officials in the half-assed city to answer?

  7. If there is a revenue shortage, the powers that be aren’t acting like it. In two years they’ve blown over $200,000 on re-districting alone when a Court was able to do it in less time for about $6,000.

    I will agree that certain departments and offices are being starved of revenue, but that’s only because the revenue is being diverted to fund the pet projects of the 25th floor and their allies on the council. The revenue does exist, but it is purposely being spent elsewhere.

    Now if our city and county governments really did tighten their belts and stopped pissing away our money on this BS and there STILL wasn’t enough money to properly fund our basic city and county services, I’d be very willing to look at a broad base tax increase.

    But until then, not one damn dime more.

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