Thursday, August 24, 2006

Riding to Riches on the Backs of the Taxpayers

Riding to Riches on the Backs of the Taxpayers

submitted by Alan S. Freemond, Sr.
Jackson Township

After reading Mrs. Kremer’s review of the St. Leon Redevelopment Commission meeting of August 09, 2006 it is obvious that the secret meeting between the DCEDI representative and ONE member of the St. Leon Town Council is beginning to bear fruit, and perhaps will be seen in years to come as a bitter fruit.

The movers and shakers of Dearborn County have formed a semisecret organization called the Dearborn County Economic Development Initiative. They have hired a man who has no roots in the County, no children in the school system, pays no property taxes to the county but has a paying job to teach the politicians how to get the taxpayers to underwrite his patrons’ desires to ride to greater riches on the backs of the taxpayers of the County.

These schemes are well know through out the country. Books have been written on the subject. There have been some colossal financial disasters for taxpayers resulting from these schemes.

Seemingly it would be important for the Town Council of St. Leon as well as the County Commissioners of Dearborn County to be in contact with the Indiana Policy Review. This is a financially conservative think tank. It is based in Fort Wayne; it has an office in Indianapolis. The organization is funded by subscriptions and funded by a financially conservative Indiana family of impeccable ethical and financial credentials. The organization publishes a quarterly review of financial doings in Indiana. The review can be slower and more complicated reading than the funny paper or the sports page. One hopes that our elected officials would stick it out and finish each edition. The Review frequently discusses various schemes thought up by groups such as the DCEDI.

One would think that our officials would be subscribers to this publication in order to protect their constituents. Had the Town Council of St. Leon been in contact with this organization perhaps they would not have been put on the back of the tiger from which they cannot dismount, namely the cruel Ordinance mandating court enforced connections to their sewer system. They might even be able to be suspicious of the DCEDI’s seductive songs.

THE DCEDI representative, who met with our Mr. Andy Bischoff, knows how to play inside the rules. The only legal way to have a secret meeting to make plans with elected officials is to meet with only one, and of course with the official’s crutch, the attorney. This he did. There is nothing to prevent the elected official to then begin a series of individual phone calls or meeting with the other elected officials. Thus a plan can be formulated in detail and then suddenly sprung upon the public, the folks who are going to pay the bills.

It is now the plan to designate TIFDs, Tax Initiated Financing Districts in St. Leon and it’s surrounding areas. TIFDs are areas in which country taxes are frozen as of the time of such designation. Bonds are usually sold to finance the TIFD projects. These bonds are guaranteed not by the DCEDI, which considers itself to be the embodiment of two-fisted red-blooded America entrepreneurs. No, they are guaranteed by the taxpayers (median income of $43,000 per year) of the county and town. This is shameful- it is actually cowardly. In common rather coarse, street jargon it would be: ”These guys won’t put their money where they mouths are.”

An example of how the taxpayers become involved would be that a project in a TIFD failed to be able to pay the interest due to those who bought the bonds that financed a project in a TIFD. This is not some far off hypothesis. It happens.

Pittsburgh, Pennsylvania was stuck for 70 million dollars worth of bonds because of a TIFD failure on the part of a very blue chip national corporation.

These bonds are guaranteed by the county, city, or town that issued the bonds. The payments to the bondholders would fall to the issuer’s taxpayers. The revenues of the county, city, or town that issued the bonds are taxes. These taxes are by the elected officials signatures mandated to pay the bondholders their guaranteed interest.
If these “entrepreneurs” really believed in their projects they’d use their own money to fund the projects it total. They wouldn’t, in a slack wristed manner, rely on the poor people of the county to support their dreams, and carry the risk of the entrepreneurs’ failures.

Whatever increased tax payments result from one of these schemes - that money beyond the original tax - will be used for future development of more projects and to help pay off the bonds that are issued to support the financing of the intended projects. There is no increase in the amount of money going to the fire department, the police department, or the schools. Yet it is the hope of the project enthusiasts that there will be a population increase of the area.

Obviously more fire protection and police protection will be needed. Of course the schools will need increased funding to educate more children who will fill the housing developments that are planned. However, no money more than the original tax money before the projects were started will go to these three vital services. The redevelopment commission spoke about funding vague “services”. However they will not put in writing and sign the writing to increase the funding of the fire and police departments and the schools in a manner that exactly reflects the increased tax take. Essentially it is as if there were not tax increases even if the assessed value of the projects in the TIFDs is increased.

Parallel to this outrage is the consequences of people whose property is, against their will, included in the TIFD, and those whose property is in close proximity to a TIFD. If the project goes well their properties will be considered more valuable, assessed at a higher amount, and they will have to pay more county taxes. Those within the TIFD, against their wishes, will be paying more taxes to increase these outrages. If such property owners can’t afford the increased taxes on their property they will have to sell or submit to the frightening awful humility of a sheriff’s sale. Who does one think will come along and buy that property for pennies on the dollar, and perhaps include it in a TIFD if it is not already in one? Of course it would be a developer and/or one of our entrepreneurs. This is a known method of driving people off their land for further commercial development.

This all has the odor of the uncontrolled sewer gas that is emanating from a lift station of the St. Leon Sewer system, the system about which we must speak at another time.

Alan S. Freemond, Sr.
Jackson Township

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