When the Indiana General Assembly established property tax caps, state lawmakers were already planning how to deal with Gary.
When the Indiana General Assembly established property tax caps, state lawmakers were already planning how to deal with Gary.
Gary has no choice but to seek the state's help after being socked by a series of financial setbacks, some of them the city's own doing but many of them not. Mayor Rudy Clay is holding a town hall meeting tonight to discuss why the city has been brought to its knees before the new Distressed Unit Appeals Board and where it goes from here.
That board was set up to deal with units of local government in distress because of the property tax caps.
The city has casino revenue, but the city is locked in litigation with Majestic Star owner Don Barden, and meanwhile the distribution that normally would go directly to the city is being put into escrow pending the resolution of the lawsuit.
The sour economy has clobbered the city as well. Each time a property is foreclosed, the city loses the property tax revenue from it.
Gary also has had to deal with a legacy of neglect. When Mayor Rudy Clay took office, for example, he inherited $4 million in overdue NIPSCO bills. The city issued a bond -- borrowed money -- to pay off its overdue utility bills.
The tales of woe go on and on.
But the focus now must no longer be on how Gary got to this point but how to get away from it as quickly as possible.
Gary Controller Celita Green has detailed fixed costs the city cannot reduce significantly -- worker's compensation and unemployment insurance, utility bills, postage and the like -- and steps the city is taking already, including putting workers on four-day weeks since Aug. 18 to shave expenses.
The city's reorganization plan calls for additional cuts, including further staff reductions and closing all but two of the city's swimming pools. It also is predicated upon adoption of a 1 percent county option income tax in 2012, something two of the three county commissioners campaigned against.
The alternative, Gary officials say, is to cut the fire and police department staffs in half and get rid of all other city employees. That's not an option. Ensuring public safety in Gary requires more police officers and firefighters than that.
The Distressed Unit Appeals Board owes it to Gary's taxpayers to scrutinize the city's numbers carefully. The city needs a bailout, but so do the taxpayers. The state board members need to carefully examine all these numbers to see whether there are additional ways the city could cut costs without impairing essential services.
