Are Your Local Indiana Officials Financially Literate

Few years back I was approached by an acquitance to support their run for local office. Coincidentally I had just reviewed some economic news on their budget situation in the town he was running in. The person gave me a beautiful speech about “giving back” and helping the poor. I asked him a direct financial question pertaining to the financial issue he would have to deal with once in office. His look was all I needed to know he had no clue in what I was asking about.

Liz Farmer addresses this question in an article from February 2014 about the impact of municipalities not having people elected with economic knowledge.

In the fall of 2012, the Minneapolis suburb of Vadnais Heights found itself with a credit rating downgraded to junk status. Local leaders in the town of 12,000 were not only insulted, but shocked. Vadnais Heights owed its disgrace to one action it didn’t think was that crucial: It had stopped making bond payments on a $25 million sports complex. The town had expected the complex to meet its borrowing costs through added revenue, but it had fallen short of estimates. So town officials had ceased paying bondholders rather than choosing to bill taxpayers for the unexpected costs.

What is particular events led to misunderstandings of laws?

Failure to understand financial outcomes, even when combined with good faith, is more dangerous to states and localities than it has ever been. Tougher ratings standards are part of the picture, but the problem goes far beyond those. Municipal and state leaders face an entirely new regulatory climate with the passage of the federal Dodd-Frank Wall Street Reform and Consumer Protection Act. That law, which is still being implemented, is bringing increased scrutiny of government financial performance on all levels.

Overall the above situations are not isolated cases. Smaller jurisdictions have issues getting economic competent people into office and usually make decisions on the fly.
I found this quote in the article to be very telling:

“When you think about it, I’m a retired cop and now I’m chairman of a finance committee of a $3 billion organization and the 10th largest city in the nation,” says San Jose, Calif., Councilman Pete Constant. “Can you imagine a corporation taking someone like that and putting them in charge of it with so little experience?”

Another Indiana School District Battling Obamacare Regulations

Image

 

More developments with Indiana school districts dealing with countless rules/regulations related to Obamacare. This story comes out of North Spencer County School Corporation. Superintendent Dan Scherry and the school board recently learned from a trade association that Obamacare would make him legally liable if fines are incurred. 

Scherry said the law states an individual could be held responsible for fines incurred for an employee working full-time that isn’t offered health insurance. To give individual employees relief from that provision of the law, the North Spencer school board on Monday discussed and approved a Patient Protection and Affordable Care Act Hold Harmless Resolution.

 

That resolution, which Scherry said was developed by the Indiana School Board Association, basically absolves administrators or other individuals from personal liability for those fines and makes the school corporation responsible.

 

 

And how much would have someone in like Mr. Scherry faced if the rule wasn’t found and dealt with? What is the process for something like this in order for a fine to happen?

“For us, it could be a $300,000 or $400,000 fine, so you’re talking about changing lives there,” said Mr. Scherry. If an employee is working more than 30 hours a week and not covered by health insurance, Scherry explained they could make a complaint with the insurance exchange through the government, then the government could impose a fine saying the business or school district didn’t follow the law. Without this resolution, Scherry said the fine could haunt individual people, but after it is passed by school boards the school corporation would be responsible.

With school districts already facing massive budget tightening as is, this new fine process will be the new normal for local taxpayers. Even though the school districts are protecting employees from not getting fined, now the taxpayer is on the hook. Go ahead and expect school corporation budgets to be cutting more from teaching areas so they can stash a “rainy day” fund for Obamacare fines.

Here is a link to the rest of the story.

I think I will just let Mr. Scherry sum up what this bill is doing to various aspects of our economy:

“It’s just a mess,”