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Bloomington Herald-Times Articles

April 10, 2009

Cost of new IU Data Center jumps
Steam leak, expansion of project delay completion, add $5.9 million to cost
By Nicole Brooks
April 10, 2009

Indiana University's $32.7 million Data Center is facing a three-month setback in construction, an additional $5.9 million in costs and possible litigation due to a steam leak and other unanticipated problems.

The future home of IU's supercomputer systems, under construction at 10th Street and the Ind. 45/46 Bypass, suffered a steam leak that compromised equipment, and officials have made an unexpected addition to the project, said IU architect Bob Meadows.

The Data Center had a temporary heating system, installed so crews could continue work on construction through the winter. A pipe in that system sprang a leak in January. It was over a weekend, no one was in the building and it wasn't discovered until workers arrived the following Monday, Meadows said.

"It ran for a long time without somebody being around." There were no computers in the building at the time, Meadows said.

"But there are these fairly sophisticated systems which deal with the outages," he said. Generators and backup battery systems were in place. There was no visible damage -- no peeling paint or water damage.

But all equipment had to be tested due to exposure to moisture.

"We want to make sure the day we take possession of this building that it is perfect," and won't create a problem three or four years down the road, Meadows said.

Plus, this backup system is for Big Red, IU's supercomputer.

"If Big Red goes down and generators and battery systems don't kick in, we've got a problem."

The steam leak has placed IU in a difficult position, Meadows said. Most of the equipment tested had no problems -- but suppliers and manufacturers won't honor their warranties unless they're certain the equipment is ship-shape, he said.

So new equipment has been ordered and is being installed, at a price tag of $4.2 million.

The biggest holdup in the Data Center's completion is the replacement of the major backup power source, which is being shipped from Germany, Meadows said.

IU is footing the bill for the equipment -- until all involved figure out who is responsible for the steam leak, he said. "Insurance companies will be talking for a long time about who's going to pay for it."

There are three major contractors on the project, said Terry Clapacs, university vice president.

"This is one of those issues that could end up in litigation," Clapacs said.

There's another holdup on construction.

IU's Big Red was set to live out its life span -- another three years -- in its current location in the Wrubel Computing Center. Then the university would purchase a new Big Red and install it in the Data Center.

But IU President Michael McRobbie decided the university's current Big Red should be moved into the Data Center, Meadows said. It is a safe location, with two-thirds of the building underground, he said.

"It just has to be moved over. And it makes lots of sense." The Data Center must be outfitted to accommodate Big Red, at a cost of $1.7 million, and "that project has not been approved by the state," Meadows said.

IU would have undertaken this project in three years when the new Big Red arrived, he said.

The bunker-style building is the centerpiece of IU's planned technology park. Staff will start moving into the building within a few weeks, Clapacs said.

The Data Center is now not set to be finished until July.

IU basketball tourney to raise money for vets
King of the Court 3-on-3 tournament Saturday at HPER fieldhouse
By Nicole Brooks
April 9, 2009

A basketball tournament hosted by the Indiana University Student Veterans Association and the IU Kelley school's Business Careers in Entertainment Club will raise money for the university's "student soldiers."

The annual 3-on-3 basketball tournament is set for noon to 5 p.m. Saturday on the Ora L. Wildermuth Fieldhouse courts in the School of Health, Physical Education, and Recreation. Registration is $30 per team.

"King of the Court 3-on-3 Easter Classic for the Troops" started in 2006. In the past, tournament proceeds went to support the Business Careers in Entertainment Club. But this year, half the proceeds will benefit the IU Student Veterans Association and Indiana Disabled Veterans of America, said event organizer Brian Binkley.

Binkley is an IU student and veteran of Iraq and Afghanistan.

Many students go home Easter weekend, Binkley said, and he encourages those still on campus and community members to come play basketball at the fieldhouse.

He hopes to have 64 three-player teams to fill this year's tournament bracket. Free Mad Mushroom Pizza and drinks will be provided to all players. There will also be three-point and Hot Shot shooting contests.

In the single-elimination tournament, the winning three-person team will come away with the grand prize from this year's title sponsor, Opie Taylor's -- free food for a year, Binkley said.

Other prizes awarded to top teams, contest winners and raffle winners will include gift cards, T-shirts from local sponsors, while there will also be basketballs autographed by either IU head coach Tom Crean or the IU Women's Basketball team.

To register, and for more information, visit People who don't want to play basketball but want to support veterans can donate money and sponsor teams by visiting that site.

"Money raised will help IU students transitioning back into campus life after serving overseas in Iraq or Afghanistan to find themselves here back in the states," Binkley said. "A lot of veterans past, present, and future need help, counseling, or just guidance after war and this event is reflecting that as well."

Hey, you whiners, your tax burden is low!
By Mike Leonard
April 9, 2009

On the first day of his introductory class on federal income tax, Ajay Mehrotra kicks things off with a slide show called "The Myth of the Overtaxed American."

Myth, as in pure fiction? You wouldn't think that to hear the carping, moaning and teeth-gnashing that peaks annually around April 15.

"The data bear this out," the Indiana University law professor said this week. "Our taxes are not as high as other Western industrial nations."

Not even close, actually.

Indiana ranks about 37th out of the 50 states in its tax burden, so Indianapolis clearly is not a problem.

"The U.S. is somewhere around 25.5 percent in total taxes as of 2004, and that's across the board, including income, consumption, social insurance (Social Security) -- the things we call payroll taxes (including state and local taxes)," he said. "It's a pretty thorough, comprehensive assessment.

"We come in at 25.5 and the OECD average is closer to 36 percent, so you can see, we are a good 10 percentage points lower," said Mehrotra, who also is co-director of the IU Center for Law, Society and Culture.

OCED stands for Organization of Economic Cooperation and Development. It includes Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, Australia, Austria, Belgium, the Czech Republic, Denmark, Finland, Greece, Hungary, Iceland, Ireland, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland and Turkey.

Sweden tops the list with a tax burden of 50.6 percent. Mexico comes in lowest, at about 19 percent. So the U.S. is much closer to Mexico than Sweden, ranking fifth from the bottom.

But here's the kicker. The U.S. does come in No. 1 in health care costs -- costs over and above our tax burden, and by far. A 2000 study of those same OECD countries showed that U.S. citizens paid $4,178 per capita in health care when the OECD median was $1,783. And the U.S. quality of care still ranked 18th out of those 30 countries.

In other words, the government isn't gouging us. Our private health care system is.

Now, what you see depends on where you stand. As Kelley School of Business tax specialist Peggy Hite pointed out, a national survey several years ago showed that Americans across the board thought that 25 percent should be the absolute maximum tax burden, for rich or poor citizens. And there's a good argument that our current tax structure is unsustainable as it stands, with the top 50 percent of taxpayers accounting for 97 percent of federal income taxes. "In fact," she wrote in a recent e-mail, "the top 1 percent pay 40 percent of the income taxes received by the federal government."

Mehrotra doesn't like that structure, either. Nor does he care for President Barack Obama's plan to only raise taxes (or let the Bush tax cuts expire) on couples with an annual income of $250,000 or more. "He seems to be tying his own hands on that one," he said. "I'm not sure it's a good idea."

The current health care crisis is just one reason to look more closely at what we spend in taxes and what we get in return. There's also that inconvenient truth that despite the enormous amount we spend on health care, more than 40 million Americans still are uninsured.

Mehrotra said that, even considering all of that, the real elephant in the room is the entitlement spending that no one can get a handle on. As baby boomers begin drawing more and more on Social Security, Medicare and Medicaid, and the people paying into those programs are fewer in number than those drawing benefits, "the demographic writing is on the wall. Right now, we're in an economic meltdown. But once this passes, that entitlement spending has to come from somewhere."

That somewhere, the IU law professor believes, is likely to be a Value Added Tax (VAT), a type of consumption tax that is levied in virtually all other industrialized countries except the U.S. "Essentially what a VAT does is require the remittance of taxes all along the supply chain," he explained.

Mehrotra said the classic example of a VAT goes like this. The farmer who grows grain and grinds it into flour pays a tax on the flour when he sells it to the bakery. When the bakery turns the flour into dough, and then, bread, the baker pays a VAT when the bread is sold. Finally, the consumer pays a tax on the finished product.

It works pretty well because it spreads the tax burden around. It doesn't work so well when it isn't skillfully set up and works like a sales tax, putting more burden on those who have to spend a greater proportion of their income on basic goods and services.

"I tend to fear liberal Democrats on this, because they myopically reject VAT as regressive taxes," Mehrotra said. "Conservatives resist because they see it as leading to the welfare state. Grover Norquist, the famous anti-tax crusader, says VAT is French for welfare state. But in reality, we can design a VAT to be far less regressive."

Something to increase federal revenue needs to happen, the IU tax expert said, and the discussion needs to begin soon. "It's going to be onerous and it's going to hurt," he admitted. "But if you look back on American tax history, fundamental tax reform doesn't happen when we want it to. It happens when it has to happen, during wars, recessions and depressions. It usually takes a crisis, and I think we might be in one of those crisis moments," Mehrotra said.