Northwest Indiana Discussion

Gary's failure doesn't help Indiana

January 11, 2010
BY JON SEIDEL, (219) 648-3068

Gary government took another beating in Indianapolis last week. Not from downstate politicians, but its own residents.

The residents, mostly but not entirely from Miller, told politicians from Indianapolis, Kokomo, Fort Wayne, Warsaw and Crawfordsville that Gary is corrupt, a tainted brand, and dependent on aid.

Some believe the state's new tax caps would mortally wound Northwest Indiana's largest city by cutting its budget in half. And they told the Indiana Distressed Unit Appeals Board to pull the trigger.

"The board must insist that the city explore Chapter 9 bankruptcy, receivership and other options which could allow the city to reset its compass and move forward," Douglas Grimes, president of the Miller Citizens Corp., said.

That doesn't seem likely this year, but those caps could become constitutional, which would leave the DUAB powerless to lift them in 2012. It isn't clear if Gary would survive, but Rep. Ed Soliday, R-Valparaiso, believes there are no winners in a Gary bankruptcy.

"There are some politicians in Northwest Indiana who think you can have a model for your little corner of the world and not deal with the issues of Gary," Soliday said, "and I just flat disagree with them."

That, he said, is because Gary's failure would damage the entire state's credit rating and isn't likely to solve the underlying problem. Not only that, but its proximity to Chicago, highways and railways give Gary great potential as an economic engine.

Sympathy for the city's condition at the Indiana Statehouse is rare, though. When asked about it, Republican Sen. Luke Kenley of Noblesville wondered aloud about millions in casino dollars that flowed through City Hall, mostly under former Mayor Scott King.

He also pointed to exceptions for Lake and St. Joseph counties in the tax cap legislation, which he authored.

"It seems to me that that was a pretty substantial concession," Kenley said.

Gary Mayor Rudy Clay's administration has cut millions from its budget since he took office in 2006 by consolidating departments, eliminating promotional funds and implementing new fees. Still, the mayor took heat from Gov. Mitch Daniels last year for hiring his son to videotape meetings at the Gary Sanitary District for $39,000, a contract Rudy Clay Jr. eventually lost.

The mayor was also scheduled to make $142,096 in 2009 between his City Hall and Gary Sanitary District salaries. By comparison, press secretary Jane Jankowski said Daniels accepted $95,000 of his $107,882 salary last year.

Nevertheless, distressed board member Mark GiaQuinta of Fort Wayne interpreted a report by Gary's fiscal monitor to mean it isn't enough to ask the city to "live within its means." If Clay gave up that salary, Gary still wouldn't have enough money.

That's why Tuesday, hours before the General Assembly went back to work for 2010, School Board member Darren Washington could be found in the halls of the Indiana Statehouse seeking a new revenue source for the city. He was pushing an income tax option for the city and the schools, and he said he'd have no problem with the state putting restrictions on how that money is used.

Gary City Clerk Suzette Raggs also wants the General Assembly to let Gary keep 100 percent of its court fees and casino tax revenue while it has distressed status.

Kenley said it wouldn't be fair to say the state isn't willing to work with Gary, but neither he nor Soliday predicted passage of those proposals.

"They don't really encourage Gary to get their budget matters kind of under control or even close to what is a normal level of control," Kenley said.

Clay said he's planted enough economic development seeds that, by 2012, the property tax base will support the local government. His city has seen sparse economic development in recent years, though, and citizens scoffed when he brought up his plan for a Michael Jackson museum to the distressed board on Wednesday.

But this might be the year that the state allows a developer to build a land-based casino in Gary. That could spark even more development.

"Gary, Indiana, is going to be better than it is today two years from now as it relates to a better quality of life for the people in the city," Clay said.

For that to really happen, Soliday said, Gary must attract middle-class residents and businesses back to the city. That's done, he said, by lowering taxes, reducing crime and exhibiting "sterling financial management." And he said state budget director Ryan Kitchell and the distressed board is already walking Gary down that path.

"We've got to coach them, we've got to help them," Soliday said. "But we've got to have some way to enforce the coaching."

When your Mayor's nickname is "The Pimp" and has no higher education, what do you expect?

The people of Gary cannot govern themselves any more than the people of Haiti.

Like Haiti, they lack education and have little work ethic.

Like Haiti, the political leaders steal all available public funds.

Send in the army to crush the drug traffic, enforce attendance in schools and oversee construction, economic development and the use of all public funds.