The Ballard administration is making an incredible claim that savings it expects city-county government to realize from a half billion dollar new criminal justice center to be built, operated and maintained by a private operator will not require a tax increase. Why can it say that? Because the administration plans to use the $25 to $30 million a year it plans to sucker the city-county council into approving this year for a promise of additional police officers to pay for those higher costs. This was the exact same bait-and-switch scheme the CIB concocted to find the money it needed to provide $200 million in subsidies to billionaire Herb Simon's Indiana Pacers.
Shortly after the construction of the new Lucas Oil Stadium was completed by the newly-created state stadium authority after enacting a regional food and beverage tax to service the debt on the nearly $750 million construction costs, the CIB announced it faced insolvency because no plans had been made for how to finance the ongoing maintenance and operating expenses. Billionaire Colts owner Jim Irsay was given free rent for use of Lucas Oil Stadium, along with revenues it generated, leaving nothing for the CIB to pay the $20 million in anticipated operating expenses. Of course, the original debt service on the RCA Dome had been traded in for a new regional tax, freeing up revenues that had been used for debt service for those operating expenses. The CIB tricked state lawmakers and the city-county council into approving a bailout deal that included millions in annual state subsidies, along with new taxes on hotels, car rentals and admissions to events. Despite claims by the CIB that the money was necessary to keep the CIB solvent, the CIB soon had a larger cash balance than the city-county government, and it began approving subsidies to the Pacers that will be worth at least $200 million over a 15-year period.
Now the Ballard administration is pushing an increase in the local income tax and the elimination of the homestead property tax credit to raise an additional $25 to $30 million in new revenues, it says, to hire police officers and help support funding for early childhood education as part of the Mayor's plan to reduce crime. A $90 million a year, 65% increase in the income tax enacted by Ballard's predecessor also promised additional police officers but actually resulted in the hiring of fewer police officers. Similarly, a merger of IMPD and the law enforcement functions of the sheriff's department promises at least $7 to $8 million in annual savings but costs increased instead.
The IBJ's Kathleen McLaughlin describes the Ballard administration's plan to privatize construction of a new criminal justice center as an "all-inclusive package" that is "gaining traction with governments that want a simpler way to deliver new public facilities." "The project could cost as much as $500 million, but it won’t require a tax hike, and the annual fee won’t be any greater than the $122.6 million a year the city now pays to operate courts and correctional facilities," McLaughlin writes. Of course, she notes that the administration refuses to turn over its financial analysis which would validate its claims. The administration is reviewing behind closed doors plans offered by three groups of bidders led by foreign entities to award the project--after it suckers the council into approving a new general tax increase to benefit public safety. It's hiding behind the state's public bidding laws that allow pending procurement offers to remain confidential until a decision to make an award is made public.
To his credit, former City Controller Jeff Spalding, a Ballard appointee, is publicly doubting the administration claims. "Former city controller Jeff Spalding said the administration’s unwillingness to walk through the math behind its conclusions makes him skeptical the new facility won’t end up requiring more public dollars," McLaughlin writes. "I want the criminal justice center to happen,” said Spalding, who left the Ballard administration in April 2013 to become director of fiscal policy and analysis at the Friedman Foundation." "There’s more potential downside if you don’t do it the right way."
McLaughlin's story notes that Houston started down a similar path but later pulled it. Why? McLaughlin's story attributes its desire to see how Indianapolis' deal turns it. Yet a Long Beach, California project referenced in McLaughlin's project has been heavily criticized. A 31-courtroom project only there will wind up costing taxpayers at least $2.3 billion over 35 years. The foreign-owned entity that built the Long Beach courthouse project, Meridiam, is one of the three finalists under consideration by the Ballard administration. Indianapolis' project includes a new jail to replace the current two jails, one operated by the sheriff, and one operated by CCA, which each provide about 1,000 bed spaces, in addition for space for other criminal justice agencies, including the prosecutor and public defenders, among others. Yet Sheriff Layton, who has been unable to control skyrocketing costs in his office, makes an incredible claim that he can handle the inmates served by both jails at a new facility without hiring any additional personnel.
McLaughlin's report also mentions the two Ohio River bridges the Daniels administration is building under a bi-state agreement with Kentucky, as well as the I-69 extension from Bloomington to Martinsville, as projects being undertaken by private operators on a build, operate and maintenance basis. The media and state lawmakers have been completely derelict in evaluating the long-term costs of those projects, which will wind up costing taxpayers much more than had traditional financing mechanisms been used. Additionally, new bridge tolls have been added as part of the Ohio River bridge construction project, which will primarily be paid by Hoosiers crossing the river into Louisville as opposed to Kentuckians traveling into Indiana. The bottom line is that you cannot believe anything these lying politicians tell you. They are natural born liars who care nothing about the public interest; they are only interested in pursuing projects that line the pockets of their campaign contributors, not projects that result in real savings to taxpayers.
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