India’s finance minister this week released a budget that includes, among other things, a five per cent reduction in the corporate income tax. Narendra Modi, the Prime Minister of India, won a landslide election last May...
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- Higher Taxes, or Less Police and Fire Protection?
Higher Taxes, or Less Police and Fire Protection?
Several Indiana cities currently face some difficult budget decisions. While each city has numerous options to increase revenues or reduce expenditures, the "Washington Monument" strategy is being utilized by some local officials. Instead of looking for efficiency gains, officials simply threaten to cut or drastically reduce a service in attempts to muster support for budget increases. The National Park Service uses this strategy, suggesting it would have to reduce visiting hours at the Washington Monument without additional funding.
From a Post-Trib Article:
In South Bend, Mayor Steve Luecke said despite several rounds of staff reductions during his 12 years in office, the city will cut 53 firefighters and 40 sworn police officers -- 15 percent of the city workforce -- to meet an expected $21.3 million cut in property tax revenue next year.
Even municipal pools are no longer open seven days a week, and by the time the full effect of HB 1001 is felt in the summer of 2010, Luecke said, they may not open at all.
"We cannot survive without additional revenue from some other source, probably in the form of an increase to the income tax," Luecke said[....]
No sane city administrator would cut a public safety budget to enjoy the fruits of recreation and neighborhood development programs. Threatening to lay off police officers and firefighters, the most visible public employees, simply scares the public into supporting a local option income tax hike. The ultimatum of higher taxes or reduced police and fire protection can produce support the Mayor's oh-so-clever hint at higher local income taxes.
It's hard to believe that a city with an operating budget of $177 million would consider such drastic cuts in response to $21 million reduction in revenues. Surely, the mayor can suggest some appropriate cost cutting before proposing a tax increase.
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