The ongoing trend in state-local government relations in Indiana is increasing paternalism. The state government, in the form of the legislature and the governor, know what is best for our counties, cities, and towns. They decide how we should live in our localities. They limit the variations in services and regulations that we have in our state. What is right for Jay and Porter counties is necessarily appropriate for Jackson and Posey counties.
If you believe in the greater wisdom of the central authority, as do liberals and conservatives alike, you will applaud the recent decision of the General Assembly to deny the people of Marion and Hamilton counties the right to vote on an augmented public transit system. (The fact that the bill in support of the local referendum failed due to political squabbling is only another example of the legislators’ inability to decide issues on their merits.)
A statewide ban on smoking in public places is another example of using the state government to resolve what could easily be seen as a local issue. Less and less authority over local schools rests with elected school boards. One legislator even wanted to regulate the singing of the national anthem. The short session of the legislature invites trivial pursuits that have no explicit budgetary implications for the state government.
When our new governor and new legislature meet in 2013 they will once again have the pleasure of considering and reorganizing our revenue and expenditure flows. They will find that the biggest chunk (43 percent) of revenue received by the state comes from the sales tax. (Data are for fiscal year 2011, July 2010 to June 2011). The total take by the state on a limited set of what we buy was $6.3 billion. In contrast, the taxes on individual income was $4.6 billion. Sin, in the form of alcohol, tobacco and wagering, brought in only $1.2 billion.
Together these three activities (working, consuming, and sinning) provided $12.1 billion or 85 percent of the state’s tax revenue.
These tax dollars, however, made up only 54 percent of the state’s total revenue of $26.5 billion. Another 35 percent was received from the federal government with the final 11 percent derived from miscellaneous fees, licenses, permits, etc.
Is this the right mix? That’s an unanswerable question. It is deemed the feasible mix as of 2011 by the General Assembly and the administration.
What does the state do with its money? Much of it is sent to localities to be spent according to rules established by the state. For example, $7.6 billion is budgeted for local K-12 schools. This appears to be generous, but the funds must be spent in the manner the state prescribes.
There is wisdom here, if the local school boards are corrupt, ignorant, or incompetent. Since schools are dependent on state-limited property taxes, there is little room for local discretion in spending and hence in educational services. Should there be such freedom or should each public school child be subjected to the same quality education?
What if schools and other local government units enjoyed a flow of revenue that was unrestricted? Would it be squandered by boards and councils seeking their own personal enrichment? If so, we do have means to remove such public servants.
The presumption of stupidity or veniality by government officials is a condemnation of local voters. If the legislature and the governor want better voters, they ought to spend some money on engaging and educating citizens in governmental processes. Voter ignorance leads to indifference and absence from the polls.
Morton Marcus is an independent economist, speaker, and writer formerly with IU’s Kelley School of Business.
Business
MORTON MARCUS: State government increasingly decides how we live in our cities
- Business
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- RESTAURANT INSPECTIONS: May 21, 2012
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EYE ON THE PIE: Use to be close tie between output, employment
Crusty Crawford joined our lunch table with a pronouncement. “We’ve always assumed a close tie between output and employment,” he said. No one responded.
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Employer opinions sought on students
A joint venture between Ready Indiana and the Indiana Department of Education is seeking employer input that will impact how Hoosier high school students are equipped for the workforce.
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Carlisle prison marks 20th anniversary
2012 marks the 20th year of service for the Wabash Valley Correctional Facility, going on line with its first offenders Dec. 10, 1992.
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SOCIAL SECURITY: Why young workers should care about Social Security
Summer will be here before we know it.
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BUSINESS CENTS: Does your staff understand pricing?
Many companies feel as though their staff will follow instructions and implement price strategies as instructed.
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Valley Child Development Center receives grant
Valley Child Development Center has been awarded a $5,000 grant from the Terre Haute Day Nursery Foundation through the Wabash Valley Community Foundation.
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Exec offers advice on becoming startup entrepreneur
Sam Clemens, chief product officer of Cambridge, Mass., startup company Insight Squared, gave Rose-Hulman Institute of Technology students insight on how to develop a startup business.
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Newsmakers: May 20, 2012
Leland Phipps, family practice physician at Paris Community Hospital/Family Medical Center, has been re-elected to membership with the American Academy of Family Physicians.
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Alumna to serve as VP for Rose-Hulman Ventures
Rose-Hulman Institute of Technology alumna Elizabeth M. Hagerman is returning to her alma mater to serve as vice president for Rose-Hulman Ventures, the institute’s successful innovation space that has spawned careers and entrepreneurial enterprises throughout Indiana.
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Summer Sidewalk Sale set
Marshall Main Street’s Downtown Summer Sidewalk Sale is planned from 8 a.m. to 2 p.m. June 9.
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Oil drops to lowest level in 6 months
The price of oil dropped to a six-month low Tuesday on concern that economic uncertainty in Europe could hurt demand for crude.
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Adidas initiative: ISU students develop business improvement process at facility
As Indiana State University students cruised Interstate 70 on Friday afternoons from Terre Haute to Indianapolis, they were looking forward to reaching their destination.
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BUSINESS BRIEFLY: May 13, 2012
An evening of networking and education for Clark, Crawford and Edgar counties regarding branding, marketing and tourism development opportunities is planned for 6:30 p.m. May 21 at the Heath Museum on the square in downtown Robinson.
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Wendy’s partners with Riley Hospital
For just $2, customers at participating Wendy’s restaurants in the Evansville/Terre Haute area can get free Jr. Frosty desserts through Dec. 31 while supporting Riley Hospital for Children at Indiana University Health.
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Marshall Chamber to stage annual golf outing
The Marshall (Ill.) Chamber of Commerce invites golfers to its annual golf outing scheduled for June 8 at the Marshall Golf Course.
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ON THE MOVE: May 13, 2012
McKenze Rogers has joined Williams Randall as an account supervisor.
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Seminar teaches seniors to fight fraud
The Federal Trade Commission estimates that 25 million Americans are victims of consumer fraud each year.
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EYE ON THE PIE: Economic tools for consumers, workers, business owners, officials
My friend is a carpenter. He has two heavy boxes of tools and several other containers with stuff.
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SOCIAL SECURITY: Potential Medicare savings for mom
Given the current economic climate, buying a nice gift for Mother’s Day may be more difficult than in years past.
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‘Best Places to Work’ honored at banquet
Companies raising the bar with their workplace practices were recognized on May 3 at the Indiana Roof Ballroom by the Indiana Chamber of Commerce.
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NEWSMAKERS: May 13, 2012
Susi Willis, CPA and partner in Larsson Woodyard & Henson, LLP, was recently presented with the Distinguished Service Award by the Indiana CPA Society at its annual CPA Celebration at the Indiana Roof Ballroom in Indianapolis.
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Indiana Rail Road wins Family-Friendly Award
The Indiana Rail Road Co. has won the Terre Haute Chamber of Commerce’s “Family-Friendly Business Award” for 2012 based on the company’s highly successful employee wellness program.
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Government cuts summer gasoline price forecast
The government says gasoline will be cheaper this summer than previously expected thanks to a drop in the price of oil.
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Mall operator becomes biggest real estate company
The nation’s largest shopping mall operator is now also the country’s largest real estate company.
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Dealership to celebrate first year
The 500 Automotive Group in Clinton will celebrate its first year in business with an big birthday bash at the dealership on Friday and Saturday.
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EYE ON THE PIE: Compensation levels did not cause the recession
America is still fascinated with “The Price is Right.”
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Old National begins year with strong first quarter
Old National Bancorp reported 1st quarter net income of $21.7 million, or $0.23 per share.
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Enroll in disaster preparedness class
The University of Illinois Extension is offering a disaster preparedness course on May 23 for Clark, Crawford and Edgar county businesses called Ready Business.
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Newsmakers: May 6, 2012
• Dr. Haytham Mansour
• Terre Haute Regional Hospital
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