Brian Eason

brian.eason@indystar.com

Since 2007, the city of Indianapolis has raised income taxes twice in order to hire new police officers.

The first time, city leaders promised to add 100. The next, as many as 150.

But on Sept. 1, the Indianapolis Metropolitan Police Department had 59 fewer officers than it did before the first tax hike took effect. And yet, the city is spending 33 percent more on police — an estimated $259 million this year, including retiree pensions — than it did in 2007.

Over the years, city officials and City-County Council members have blamed troubles growing the police force on a number of factors: the recession and property tax caps, the rising costs of health care and equipment and challenges associated with attrition. And all have played a role.

But an IndyStar analysis of city budget documents and payroll records found that the biggest reason the city is spending more for fewer cops also is one of the least discussed: pay raises for police.

IMPD's 1,600 or so officers get paid upwards of 25 percent more today than they did nine years ago.

Nonunion city employee pay went up around 5 percent in the same period; that's essentially a pay cut when you account for 16 percent inflation. Meanwhile, the typical Marion County household — in short, the people paying for the raises — lost even more ground. The median income here dropped 5 percent from 2007 to 2014, according to the latest Census estimates.

When you add it all up — the rising personnel costs, inflation and the city's plummeting revenues — the 2007 tax hike wasn't even enough to pay for the officers the city already had, much less add 100 more. So when the council voted in 2014 to raise taxes again — again, promising the money would hire more officers — some of the $16 million a year it generated for IMPD is still paying the bill for nine years of contractual pay raises that the city hasn't been able to afford.

Meanwhile, murders continue to rise. Indianapolis already has recorded 100 criminal homicides this year, putting it on pace to break 2014's record-setting 144. Nonfatal shootings are up more than 20 percent.

Mayor Joe Hogsett campaigned on adding 150 officers by 2019 using the prior income taxes — a promise the administration insists it will keep.

It's just not clear how. The city has less money, but is spending more of it on police. And Hogsett wants to hire more officers, but to stay competitive with other cities, he may have to spend more on pay raises just to keep the ones he already has.

Higher taxes, fewer cops

When Democratic Mayor Bart Peterson was voted out of office in the tax revolt of 2007, it would have been unthinkable that the city wouldn't have enough money. If anything, the typical voter thought its government was already asking for too much.

A change in how property taxes were assessed drove huge increases in property tax bills for many Indianapolis residents. And on top of that, the city would institute its first ever public safety income tax, a projected $90 million levy that was supposed to be split into thirds among IMPD, unfunded police and fire pensions and the Marion County criminal justice system.

Over the next few years, the bottom fell out. The state would respond to the property tax surge by instituting property tax caps, right as the housing crisis sent more than 6,700 homes into tax foreclosure. City property tax collections plummeted by $120 million in 2009 — a 30 percent dive. At the same time, the recession drove down incomes, cutting into projected income tax growth. And Republican Mayor Greg Ballard responded by slashing city services, nixing recruiting classes and socking away as much as money as he could until the economy and the city budget could recover.

When Troy Riggs came on as public safety director in 2012, the city was nearing a modern low in police staffing. It would bottom out a year later at 1,535 officers — 71 below what the city had when the tax hikes hit, and 171 below what was promised.

“Quite frankly, I’m being told in the interview process I’m here to balance budgets,” Riggs said. But after years of cuts, there was money left over to spend.

"We had recommended taking that money that we had saved and put it into hiring new officers, because at that point the police department hadn’t really hired new officers in a while. We were struggling mightily."

In 2014, the city added a net of 23 officers for the first time since 2010. But it had to bust IMPD's budget to do so. By the end of the year, IMPD had just $1.2 million in its fund balance — less than 1 percent of what it spends each year.

That same year, a bipartisan staffing commission recommended raising income taxes and eliminating the homestead property tax credit to raise $28 million for an additional 270 officers by 2018. The council agreed only to the income tax hike, which, combined with the 2007 hike, added up to a 0.65 percent public safety income tax.

But again, not all of the money went to IMPD. County criminal justice departments got nearly half — the Marion County Sheriff's Department's budget has gone up 35 percent since 2007. And after the $7.5 million homestead tax proposal was nixed, that left IMPD with about $16 million a year to spend.

The next year, IMPD hired 155 new officers, its largest recruiting effort in at least a decade. After attrition, that brought the total figure up to 1,653: the most since a recent peak of 1,683 in 2010.

That summer, Riggs resigned as Ballard's public safety director. And when he returned a year later as Hogsett's chief of police, he inherited a department that had underestimated how many officers would retire.

Riggs said he had projected 65 to 75 departures. When he came back as chief, IMPD had only accounted for 49. Year to date, there's already been 69. Now, IMPD will need an end-of-year hiring spree to bring the force back to 1,650.

Mixed messages

Council members have been perplexed and infuriated by the dwindling police ranks. And when contacted by IndyStar, few could articulate why taxpayers were shelling out more money for fewer officers.

"I don't have the answer to that," said Councilman Aaron Freeman, a Republican. "But you're asking the right questions.

"I believe fundamentally that we’re not allocating it to where it should be going," Freeman added. “We’re not adding to the ranks, if anything we’re just treading water.”

In part, the council's expectations may not have aligned with the administration's. Ballard's proposed staffing model called for 150 hires in 2015, but a net increase of only 122 by 2018 when you account for attrition.

Freeman was among those pushing for a net increase of 150 officers — a number that the council's chief financial officer, Bart Brown, says the new taxes could support.

"When I did my analysis we were spending about $75,000 for a first year officer, and then it got to about $100,000 after the third year" including a patrol car and equipment, Brown said. Multiply $100,000 by 150, and it comes in under the $16 million the tax was generating for IMPD.

The trouble is, part of that $16 million is still paying for the officers the city already couldn't afford.

“We were hoping it didn’t have to, but in reality we’re relying on it to help," Brown said. "The problem is the health insurance and the contract. That’s what we have trouble funding. If you really look at the big funding issues for IMPD, it really is anything we negotiate for pay raises and health insurance.”

Rick Snyder, president of the Indianapolis Fraternal Order of Police, the IMPD union, did not return messages seeking comment. But at last week's budget hearing, he made an implicit case for additional pay raises, even as he said he couldn't discuss ongoing contract negotiations. All three city labor contracts, for police, fire and other unionized workers expire this year.

“We have to take aggressive steps … to make sure we do everything we can, not only in 2017 but in future years to retain this quality workforce that we have,” Snyder said. "Nearly half of our police department every single year is injured in the line of duty, Tell me any other profession, any other organization where that would be acceptable.”

A Hogsett spokeswoman declined to comment on contract negotiations, and the city would not say what the 2017 budget proposal assumes in terms of pay.

Today, a third-year patrolman makes $65,452, up from $51,571 in 2007. A sergeant's base pay is $72,578.07, lieutenants start at $80,220.19, and captains make $88,918.05. Officers also receive bonuses for things like longevity. Because the Indianapolis Professional Firefighters union has a police pay parity clause in its contract, firefighter pay has gone up a similar amount, squeezing city funds even further.

Whatever the outcome of contract negotiations, it is sure to impact the city's ability to meet its police staffing goals. If police pay had risen at the same rate as non-union employees over the past nine years, IMPD would have saved enough money for at least 180 more officers.

Riggs said IMPD's pay is "in the average category, but low-average" when compared to similar departments around the country. And, he added, the rising costs of public safety — from personnel to equipment — are something governments across the country are going to have to address.

"Think about what police departments are being asked to do now," Riggs said. “We’re going to have to pay a good wage for individuals that we’re asking to do this type of work."

Fewer cops, more spending

Exactly how the $16 million is being spent is not clear. Public safety income tax money is commingled with IMPD's other revenues, and Brown said there's no way to segregate income tax spending from property taxes and other sources in city budget reports.

Hogsett, meanwhile, has promised to get to 1,743 officers by 2019 using existing tax rates — a 5 percent increase in uniformed staffing. Riggs wants to grow the department's civilian workforce, too, because officers today are being asked to do administrative work that civilians could do for less.

With future pay raises and inflation likely to swallow any tax growth, it's unclear how the department will afford it all. Riggs says he's spending the money he has.

Further scrutiny of the budget, though, has revealed even more questions about past practices.

Republican Councilman Jeff Miller started looking into police hiring last year and discovered that the department didn't even known how much money it was saving from annual attrition.

"I couldn’t continue to hear that we’re losing let’s say, 50-some officers this year — net, not gross — and yet we need to raise a public safety tax to hire officers," Miller said. "The math wasn’t working."

After working with city finance officials, Miller determined that after payouts of accrued comp time, the city only saved $2.4 million in 2015 through attrition, even though $5.4 million in salaries came off the books. The department, he said, was "guessing" at what the real number was.

At a budget hearing last week, Assistant Chief Bryan Roach acknowledged that the department didn't have a good handle previously on its attrition costs. This year, for instance, they projected a savings of $3.5 million, but only realized $2.1 million. "We’re upside down about $1.4 million," he said. "This is the first time that I think we can actually give you a good number."

The Star's analysis of payroll records found something else: The city spent $8.3 million on overtime in 2015, more than double what it spent in 2013 when it had 120 fewer officers.

When asked why overtime was so high, Riggs said he wasn't at the department then, and was waiting on an internal audit to determine what happened. “That level of overtime is most likely not sustainable," he said.

Riggs says he's continuing to look for savings, but the budget constraints have made it difficult to implement the programs he believes will reduce crime, such as a return to beat policing, even as police are asked to assist with more events and festivals then ever before.

“If they hadn’t raised the revenue and we did not have those additional officers in 2014, 2015, the struggles we would be having right now would be incredible," Riggs said. "We would’ve been at levels so low it would’ve been hard to perform basic police functions.”

By the end of the year, IMPD is expected to be 93 officers short of Hogsett's target of 1,743. Not accounting for pay raises, reaching that goal would cost another $9.3 million a year.

After two tax hikes produced 59 fewer officers, Hogsett says he'll increase the ranks without asking taxpayers for a third.

Call IndyStar reporter Brian Eason at (317) 444-6129. Follow him on Twitter: @brianeason.