The Journal Gazette
Tuesday, January 19, 2016 10:03 pm

Officials question sales tax lobbying

Dave Gong | The Journal Gazette

Some of Allen County’s elected officials have concerns about how Greater Fort Wayne Inc. pays for its lobbying efforts.

Particularly, those officials – 18 of whom signed a letter addressed to Greater Fort Wayne CEO Eric Doden – are concerned with the organization’s push for a public referendum for a sales tax increase to help raise matching funds for the state’s Regional Cities Initiative. Northeast Indiana was awarded a $42 million grant through that initiative late last year. 

According to its 2016 legislative platform, Greater Fort Wayne is supporting a public referendum for a 1 percent county sales tax for community-approved Regional Cities Initiative projects. The tax would generate about $24 million, the platform states.

Greater Fort Wayne was created with the merger of the Greater Fort Wayne Chamber of Commerce and the Fort Wayne-Allen County Economic Development Alliance in 2013. 

Six Fort Wayne City Council members, five Allen County Council members, four state representatives and three state senators signed the letter dated Monday. All of the signatories are Republicans.

City Councilman Geoff Paddock, D-5th, said he had not been made aware of the letter before its public release. Councilman John Crawford, R-at large, was the only Republican City Council member who did not sign the letter. Crawford, who is the council’s representative to Greater Fort Wayne this year, said he felt it was best to remain impartial at this stage, though he did not object to the letter or its content. 

"Naturally, there is some concern that as City Council and County Council appropriates funds to GFW, those funds are used by GFW to lobby the very entities that appropriated those funds," the letter states.

"Moreover, the advocacy for increased sales tax, while a state issue, may create the perception that these local legislative bodies are supportive of lobbying activity upon the state. As elected officials, we have fiduciary responsibilities of safeguarding taxpayer’s interests. The potential use of taxpayer funds to advocate for additional taxes upon the very people we represent is contrary to that goal."

The city and county both contribute about $250,000 annually to Greater Fort Wayne for operating costs. In its 2016 budget, the County Council approved a $300,000 contribution to the group. 

City Council President Russ Jehl, R-2nd, said the letter is not a comment on the validity of lobbying itself but is asking whether it’s appropriate for taxpayer money to be used to advocate for a tax increase and whether Greater Fort Wayne is lobbying the legislature as official representatives of the city of Fort Wayne and Allen County.

"Right now, when they come in and say they have to raise taxes, no one knows whether the city and county is endorsing that, but they’re using our tax dollars to do it," Jehl said. "I don’t recall the city and county officially supporting sales tax increases."

About 81 percent of the annual budget for Greater Fort Wayne is made up of private funds, said John Urbahns, the organization’s executive vice president of economic development. The remaining 19 percent is public money, which is used only for economic development services, he said.

"There is a very clear line of demarcation between the two," Urbahns said. "Our board looks at the process, as do our auditors. It’s very clear and easily explained. We will be happy to sit down with anyone of those elected officials and explain and assure them that none of the funds from the local communities are being used for lobbying efforts."

Urbahns said none of the elected officials approached Greater Fort Wayne to express concern with the organization’s lobbying prior to the letter’s release.

Although Greater Fort Wayne does receive private funding in addition to public money, Jehl said he doesn’t think it’s possible to completely divest the city and county’s money from the private funds. 

"It seems impossible to me to separate all those funds and say when they are at a legislative forum that money doesn’t count, that it’s paid from the other pot," Jehl said. "The lobbying is throughout the entire organization, it’s in personnel, agendas, meetings; … it goes to things as simple as the very paper on which these initiatives are printed."

Subscribe to our newsletters

* indicates required