Eliminate Property Taxes!

Indiana's Spending Spree

2007-08-28T17:25:00.000-07:00

The Tribune had an article today about increasing sales or income tax to replace property taxes. According to the Legislative Services Agency, to bring in the same amount of revenue without property taxes, sales tax would need to more than double – from 6 to 13 percent.

The other option would be to increase individual income taxes from 3.4 to 9 percent.

As the Tribune pointed out neither of these options would be very popular. Taxes never are.

Whether these numbers are accurate or not, I don't know. The fact of that matter is however, that Hoosiers will pay out the same amount no matter what form of tax, or combination of taxes it may be. I still advocate totally eliminating property taxes, but I am an even bigger advocate of cutting spending and increasing government efficiency.

Perhaps the reported percentage increases to replace property taxes will wake people up the ridiculous spending spree our government is on.

It's got to stop.

Daniels cautious about total elimination

2007-08-22T10:21:00.000-07:00

Following from the South Bend Tribune:

Daniels open to killing property taxes?On Lakeville stop, governor says it's worth weighing

LAKEVILLE -- Gov. Mitch Daniels stopped short of saying he would seek to eliminate property taxes in Indiana here Tuesday, but suggested the issue is one that requires examination."We ought to look and see," Daniels said in response to a question. "We certainly need to head in that direction and go as far as we can."One way to start, according to Daniels, would be for counties to adopt local option income taxes that could be used to reduce property taxes dollar for dollar... more.

TAX CHURCHES!!!!

2007-08-21T16:04:00.000-07:00

On Sunday, the IndyStar had a story entitled “$2.7 billion in property untaxed in Marion County. One idea gaining traction nationwide is a fee for public services in lieu of property taxes.”

Here it comes. It’s time to tax churches and non-profits. Twenty years ago such a suggestion would have been unthinkable; now it’s being thrown out as a viable option.

This is one of the major reasons why property taxes should be eliminated completely, to protect churches from government taxation. To think something as un-constitutional as this is even being considered is amazing. But no sooner did the story come out than many bloggers started clamoring in agreement, as if tax-exempts are the cause for the current property tax crisis in Indiana.

This country has NEVER allowed the taxation of churches, not for any reason or any cause. Ten years ago non-profits were tax exempt in Indiana and it was not a problem with anyone. Now, in 2007, we have a tax crisis, and of course it is the non-profits that are the problem!

Well friends, I’m here to say that that is not the problem at all. As Polis Politics so adequately pointed out, uncontrolled spending and government waste is why we are where we are today.

Eliminating Property Taxes: What will it take?

2007-08-09T18:03:00.000-07:00

While support for the idea of eliminating property taxes seems to be on the rise, there is a difference in opinion about what it will take. Indiana property taxes bring in nearly $6 billion, and somehow, that figure will need to be replaced.

Eric Miller of Advance America has a plan to completely eliminate property taxes which would raise the state income tax from 3.4% to 4.4% and the sales tax from 6% to 8%.

However, many disagree with his figures, most notably some Senate Republicans.

Senator Luke Kenley has been on a commission studying property taxes for several years and also sponsored the bill this past session allowing Local Option Income Taxes (LOIT) to help relieve the property owner and set the "circuit breaker law" allowing only 2% of assessed value of private property to be taxed. Senator Kenley disagrees with Miller's numbers stating that either the income tax would need to rise to 8.4 percent, or the sales tax would need to rise to 12 percent.

This difference may be the fact that Miller's plan takes into account what he calls a "state spending cap" saving the state $1.543 billion, whereas Kenley probably does not include this in his calculations.

What seems to be the major difference in their calculations is that Miller's plan includes savings from spending cuts and Kenley's does not. Unfortunately, the Senate Republicans have not been overly enthusiastic about tightening the belt in the State budget and have approved funds for a number of new special programs which are paid on the backs of Indiana tax payers.

That needs to change.

So Now we know Why...

2007-08-06T13:18:00.000-07:00

Over on HoosierAccess, a great post entitled "So Now we know Why..." was published by Brian Sikma. Go read it.

Many people ask me, "So what are you going to replace property taxes with?" I tell them three possible things:

1. Sales tax.
2. Income tax.
3. Spending cuts.

We CAN be more efficient and we MUST be. It's sad, but here in South Bend over 50% of our students drop out before graduating from our expensive High Schools. Sometimes I think the one room school houses 150 years ago heated by wood burning stoves produced better educations and definitely better citizens than many of our multi-million dollar palace High Schools today.

Just a thought... Americans need to realize that money isn't the solvent for every (or even most) problems.

Property Tax Elimination Advantages

2007-08-04T10:09:00.000-07:00

There are several ideas that I want to eventually develop on this blog highlighting the advantages of totally eliminating the Property Tax system and replacing it with spending cuts, sales tax and income tax. Here are a few of them:

How much money is saved by not having all the paperwork, assessors, appraisal appeals, tax sales and everything that is associated with having to collect property taxes.
Out of state residents will contribute to the local governments through sales tax.
Every working and spending individual will contribute rather than just property owners.
The American Dream to own your own home will actually be a reality.
You could leave a piece of land for a decade and come back and it will still be yours.
You will no longer have to pay “rent” to the government.

Why?

2007-08-04T10:07:00.000-07:00

“Why did our legislators do nothing to avert the present property tax system, when they knew it was coming?” That is a question that I’ve had and I am sure many others have had as well.
Well, I’m finding out that some politicians did try, but they received no support from the leadership.

Last night, I spoke with a lady from South Bend. She has not received her tax bill yet, but her house re-assessment went up $30,000. But she couldn’t even sell her house if she wanted to, let alone for +$30,000 because there are curently three vacant houses on her block!

This past session what is called the circuit breaker law was passed not allowing local governments to tax property more than a certain percentage of what the property is worth. So, what do our local governments do? Assess the property values much higher than their market value actually is, circumventing the circuit breaker law.

Every day, I am more convinced that totally eliminating the Property Tax is the only real way to deal with this highly arbitrary tax system

House Republican Tax Plan

2007-08-01T14:37:00.000-07:00

House Republicans offered a $200 million property tax relief plan yesterday with the following are some of its key points:

• Taking $100 million of the state's surplus to fund an additional property tax credit for all homesteads.

• Changing rebate checks, passed by this year's legislature, to credits.

• Extending the filing deadline for homestead credits for this year's tax bills to Sept. 30, or 45 days before a county issues its final tax bill to be paid this year, whichever is later.

• Letting local government decide how best to target the $300 million in property tax relief the legislature approved this year. Under that plan, all homeowners are to receive rebate checks.

• Switching some of the costs of child welfare from the counties to the state.

Something like this needs to be done. However, Daniels still has not given the go ahead for using the $200 million of the state surplus. Neither are Indiana lawmakers agreed on the need for a special session or the timing of that session. So a lot could happen between now and when they do actually do something.

This is only relief, which, while necessary, should only be something to hold us over to a permanent fix, such as the elimination of property taxes.

New Blog "Hoosier Access"

2007-08-01T13:22:00.000-07:00

There is a NEW Hoosier blog that I want you all to know about. It's called "Hoosier Access" and it just launched today. Following is the official announcement:

On August 1, 2007 the newest addition to the conservative blogosphere in Indiana will open for business.

Announcing the first community-driven website in Indiana where Hoosiers can communicate directly with each other and our elected officials – www.HoosierAccess.com .

Join the conversation! The revolution starts now!

-The Directors of Hoosier Access

From what I understand, Hoosier Access will have a particular focus on the property tax debate here in Indiana during the month of August.

Check it out. I think you'll like what you see!

'Mitch the Knife' Meets 'Joe the Property Owner'

2007-07-31T05:52:00.000-07:00

The following article is reproduced from the Indiana Policy Review. It is a little long, but is well worth the read.

'Mitch the Knife' Meets 'Joe the Property Owner'

The author, an adjunct scholar of the Indiana Policy Review Foundation, is a professor of economics at Indiana University (New Albany). An abbreviated version of this article appeared in the Wall Street Journal weekend edition of July 28, 2007.

by Eric Schansberg, Ph.D.

On July 4th, hundreds of protestors showed up in front of the governor's mansion in Indianapolis. They've been back in the streets several times since. As a result, Gov. Mitch Daniels has been scrambling, the city's mayor has ordered a hiring freeze and a 10 percent cut in his budget and there have been calls for a special session for the legislature and even a state constitutional convention.

Runaway property taxes are an issue wherever property values have shot up in recent years. But now Indiana may be at the forefront of a homeowner rebellion against a tax system that has come to be seen as arbitrary, unfair and unpredictable. What's driving this angst is the first reassessment of property values in six years and the resulting property tax bills. In Marion County (the city of Indianapolis), average property taxes increased sharply-by 34 percent. Across the state, the average increase is 24 percent. And these are only averages. Many homeowners are facing much larger increases.

As always, there is no shortage of short-run prescriptions. One thing that is really stirring anger: Marion County businesses mostly avoided an increase this year, while almost all homeowners saw higher tax bills. To cool tempers, Mr. Daniels, a Republican, ordered another reassessment and a freeze on property taxes in the meantime in Marion County — delaying increases for at least six months. He has also given counties a few months to rethink whether they'd like to increase local income taxes to offset the need for higher property tax revenues. And taxpayers will now be able to pay their property taxes on an installment plan.

All of this is a nice start. But none of it addresses the underlying problem: taxing property at a value that periodically increases can stick homeowners with a surprisingly high bill. The system punishes those who made smart (or lucky) home purchases and can force people out of the neighborhoods they've built a family in.

Property taxes also, at the margin, lower property values. Retired Indiana University economist Morton Marcus calculates that for every $1,000 increase in property taxes, the value of a home falls by almost $12,000. Moreover, high and uncertain property taxes make it difficult to attract workers and capital investment to the state.

The governor isn't alone in hoping that a quick fix will do the trick. House Speaker Patrick Bauer, a Democrat from South Bend, wants to use some of the state's budget surplus to issue qualified homeowners a tax rebate. But the state is already scheduled to implement another band-aid (through Mr. Bauer's leadership last year): to pay out some $300 million in property tax abatement. Indy Mayor Bart Peterson, also a Democrat, wants to borrow $75 million to pay for cutting property tax increases. And he has proposed to hike local income taxes by 65 percent.

Perhaps the most promising short-term fix being considered would accelerate a "circuit breaker" to cap a total tax bill at 2 percent of a property's assessed value. The legislature passed this last year, but it isn’t scheduled to go into effect until next year. Implementing it ayear early could mitigate the current crisis.

But politicians may not be able to finesse their way out this time. They've been tinkering with the system since 1973, when lawmakers faced similar problems with property taxes and tried to fix them by allowing for local income taxes, doubling the state's sales tax and allowing public school teachers to collectively bargain. Indiana's property tax may be so flawed-and the public sufficiently cynical-that changes to the system may not gain necessary public support. The best option might be to toss the property tax out the window and replace it with higher income, sales or a "fair" consumption tax.

This would dismantle an unwieldy system where some 1,008 town assessors evaluate property values and pass their assessments onto 92 county assessors, who then pass their assessments to state officials. With so many assessors involved, it's no wonder the system can produce arbitrary results-residents in similar homes in similar areas paying very different tax bills.

Property taxes are, of course, useful in that they provide a stable and independent revenue source for local governments-which cause them to be more responsive to the people. It's also a highly visible form of taxation. Property taxes seem to take a bigger bite out of homeowners than other taxes because they are paid only once or twice a year — unlike income taxes, which are automatically deducted from regular paychecks. As we see now, greater visibility makes it difficult to increase taxes without fearing a public backlash.

And the fear of the lash is producing some interesting political results. Mayor Peterson faces voters in the fall, which may explain why he has reacted so swiftly. Speaker Bauer wants to protect a slim majority in the House after next year's elections, which may explain why he's eager to put his name on tax rebates for homeowners.

For his part, Mr. Daniels has called on his staff to brainstorm for ideas, has encouraged them to meet with affected people and is weighing whether to call the legislature back into town to enact reforms. He has expressed interest in eliminating the property tax. And he seems quite interested in another significant issue-reducing the number of local governments in the state. Beyond its high number of counties and townships, Indiana has 2,730 local taxing authorities. Eliminating some of these may help with tax reform.

Mr. Daniels is favored to win a second term as governor next year. But if he's not careful, he could yet stumble in his bid. Eric Miller, Mr. Daniels's 2004 primary opponent and a vociferous property-tax opponent, might be tempted to challenge him again. And a set of seemingly weak Democratic challengers could suddenly become competitive against a governor unable to handle such a thorny issue.

Reforming local government has been a top priority for the governor. But that was before homeowners took to the streets to protest their property tax bills. At times, Mr. Daniels has shown a willingness and to go outside the box-in particular, with "Major Moves" (his road privatization initiative for the I-69 extension). Will he play it safe here or work for significant change? Now that the public has spoken, will Mr. Daniels listen?

Dr. Schansberg is a professor of economics at Indiana University (New Albany), an adjunct scholar for the Indiana Policy Review and the author of "Turn Neither to the Right nor to the Left: A Thinking Christian's Guide to Politics and Public Policy" (Alertness Books, 2003).

Don't listen to the nay sayers!

2007-07-30T13:08:00.000-07:00

For an interesting read, check out this this post entitled "Jackie Walorski and the anti-tax crowd."

Supposedly, the "anti-tax crowd" (that means us, though we never claimed to be "anti-tax") wants to "choke off local governments in the name of justice" by eliminating property taxes.

May I dissent? To the contrary of what Thomas claims, it is not our desire to "choke off local governments." We do not mean to eliminate our schools, our libraries, our fire departments, etc, etc, etc. For crying out loud, I'm a township firefighter myself!

However, we can eliminate preperty taxes by replacing it. And we can cut back spending as well (yes, even in my department). There is a huge difference, that few local governments seem to recognize, between what you need and what you want. And we can save even more money by eliminating the hassles associated with property taxes.

Mr. Thomas may not want to consider this idea now, but when tens of thousands of hoosiers demand it, he won't have a choice.

He also claims that we want this elimination "NOW!" We aren't so impractical as he would have people believe. Everyone knows that when we are using that word in governnment, it usually refers to a few years at least!

NEW TAXES! YAY!

2007-07-28T18:46:00.000-07:00

The IndyStar reports:

"Six Indiana counties have adopted a new local option income tax to help offset the loss of business inventory taxes and lessen the impact of property tax reassessments, according to the Indiana Department of Local Government Finance. Jay County Council two weeks ago imposed the levy growth income tax, the property tax relief income tax and the public safety income tax, for a total new income tax of 0.95 percent, said Auditor Freda Corwin.
Jay County already had a 1.5 percent income tax (a third of which is earmarked for economic development), so the existing and new income taxes combined will total 2.45 percent."

OK, this is wonderful, right? Wrong. While the 0.95 %, only 0.50% of that is for property tax relief. What about the remaining 0.45%? Oh, that would be new taxes!

So the taxpayer is the loser, as usual.

WANTED: LEADERSHIP!!

2007-07-26T14:21:00.000-07:00

State Rep Tom Dermondy has a piece in this morning's South Bend Tribune clearly pointing out the futility of a special session without a bipartisan long term plan to solve the problem.

At this point, the only legislator who seems to have any kind of a long term plan is Rep. Walorski, who is strongly advocating the elimination of property taxes. While other legislators (such as Bauer) scorn her plan, they fail to offer up any other permanent solution to this problem. That is because there really is no other long term, permanent solution.

Reassessments Questioned by Assessors

2007-07-26T13:54:00.000-07:00

Governor Daniel's order to reassess three more counties yesterday (Delaware, Gibson, Posey) effectiveness is being questioned. The Governor bases his order on his belief that commercial properties in those counties were not correctly assessed, their rates increasing little from that of last year , and that the homeowner is thereby getting hit much harder.

However, the assessors in Delaware and Posey counties contend that commercial property value has decreased, citing empty plants and storefronts, which is why the commercial property tax did not always increase proportionally to the residential property tax. In fact, some counties hired private, state approved contractors to do the commercial property assessments.

Essentially, reassessments may not change anything.

And of course Speaker Pat Bauer is busy playing politics, reiterating his call for the administration to "accept responsibility for its role in creating this mess" and pay for the reassessments."

Speaker Bauer playing Politics

2007-07-25T18:58:00.000-07:00

WSBT-TV reported today on Jackie Walorski's petition drive to eliminate property taxes. Speaker Bauer (D-South Bend) was also interviewed.

"But Speaker B. Pat Bauer says her plan to eliminate the property tax is impossible.“You would have to eliminate local schools and/or local government, local police and local fire,” he explained. “Or you would have to replace that property tax with another source of revenue, and the only two sources of revenue on the state level that raise any money are sales and income [taxes].”

Does Pat Bauer think we're stupid? Of course most of the revenue will have to be replaced! While we strongly believe spending should also be cut back, most of our opposition to property taxes is founded on the fact that it is a very poor system. It's extremely subjective, corrupt at times, and very costly.

So why did Bauer say this? It's all in a single word; politics. If it's not his idea, it's a bad idea. Thank you Mr. Bauer for your bipartisan effort to help the people of Indiana! What a joke!

Eliminating Property Taxes gaining momentum

2007-07-25T15:36:00.001-07:00

Indianapolis Republican Mayoral candidate Greg Ballard had the following on his blog today:

I believe residential property taxes need to be eliminated as soon as possible with an ultimate goal of constitutionally eliminating all state-wide property taxes. Why not just modify the tax? I’ve talked with many people on this subject, including a noted economist/tax specialist who has researched state property taxes back to 1933 and worked on state taxing issues since the early 1970s. Property tax relief has been the mantra of all reform since the 1930s, but only Otis Bowen made it work and once he left office, the monster grew again. That’s what governments programs do. Grow. We must cut off the head of this snake or it will grow again. The American Dream awaits.

To read more, click here.

Governor orders Reassessments in three counties

2007-07-25T14:26:00.000-07:00

Governor Daniels ordered three counties be reasessed today. While this is a necessary step, it must be remembered that this is dealing with the immediate problem and is not part of a long-term solution.

State Reps and Property Tax

2007-07-24T15:54:00.000-07:00

Columnist Matthew Tully of the Indianapolis Star notes in his column today:

Do the math: State Reps. David Orentlicher and Jon Elrod have been the most visible local lawmakers during this time of property tax protesting. That's understandable. Unlike most lawmakers, Republican Elrod and Democrat Orentlicher come from swing districts that will be hotly contested in next year's elections. Aggressive, hardworking legislators? Makes you wonder what the Statehouse would be like if most districts weren't gerrymandered to guarantee incumbent re-election.

While this may be true of most legislators, in House District (21), which is generally considered a strong Republican District, Republican Rep. Walorski has been extremely vocal in addressing the tax crisis, through press releases, protests, and a petition drive to eliminate property taxes completely.

Today's Property Tax News

2007-07-24T08:43:00.000-07:00

The property tax debate continues to heat up across the state of Indiana as people get their tax bills. Mike Smith, from the AP, reports:

INDIANAPOLIS --- Taxes on homeowners are expected to increase by 24 percent on average statewide this year, but many taxpayers face bills that have spiked higher. Several factors are driving up bills in many parts of the state, including trending. That's a new system that uses formulas to estimate how much property values have increased since 1999, the base year for the last reassessment.But many people who attended the meeting before the Commission on State Tax and Finance Policy said the system was simply broken, and this year's bills were unacceptable.Some suggested property taxes be eliminated completely, which drew applause and cheers from many.
Greg Meyer of Indianapolis said he was blind, has epilepsy and diabetes and, like many with disabilities, lives on a fixed income. He said his property taxes jumped 60 percent this year. They have gone up an average of 34 percent on homeowners in Marion County.
"This is ludicrous," Meyer said. "I don't know how we are going to pay for this and what we will have to cut out of our lives."
Linda Frigand of Indianapolis said her taxes went up 235 percent."It makes the American dream of owning a home a nightmare," she said.

The IndyStar, in an article entitled “7 hours makes it clear: People want tax relief” also reported:

Many of the 300 or so citizens who filled the auditorium at the Indiana Government Center South on Monday didn't want to settle for lower property tax bills. They wanted no property tax bills at all.
Dave Bursten, an Indiana State Police sergeant who testified Monday solely as a fed-up Marion County homeowner, said that ordering a do-over of Marion County's reassessment won't fix the long-term problem.
"After I make my last payment to GMAC," he said of his mortgage company, "I will pay my landlord, the state of Indiana, until the day I die."
The Rev. Mmoja Ajabu with Light of the World Christian Church compared it to slavery, telling the panel: "Because of property taxes, you have practically made everybody a slave to the state."
He urged the state to abolish property taxes for homeowners, though not for commercial property, and to raise sales and income taxes, with a tax credit to help lower-income people, whom higher sales taxes would hit hard.
Several people noted that eliminating property taxes would require a constitutional amendment. That couldn't happen until 2011 at the earliest, because it would need to be passed by two separately elected legislatures and by voters on the 2010 ballot. But while they wanted that constitutional change, they also said that 2011 was too long to wait for help.

While many scorn the idea of totally Eliminating Property Taxes, it is undeniable that the general public is demanding that it be considered as a viable option. It is the responsibility of our elected officials to adequately research this option and present the best plan for doing so.

Commission on State Tax and Financing Policy is meeting today

2007-07-23T09:52:00.000-07:00

It looks like it's getting hot for some folks down in Indy.

The IndyStar reports:

"People united in anger over property tax bills and a desire to see the whole system eliminated appealed today for help before a state commission investigating Indiana's property tax mess."

Guess what? I agree with the "people" in that statement.

HPR Highlights Property Tax Protest in Elkhart

2007-07-23T08:48:00.000-07:00

Today, the Howey Political Report highlighted Rep. Walorski's leadership in the Elkhart County 4H Fair Parade, demanding that our state officials address the property tax crisis with real solutions.

Hopefully, other state officials will follow Walorski's example and get in front of the protests and lead the way towards real progress.

Jackie Walorski and 100+ march to end Property Taxes

2007-07-22T18:45:00.000-07:00

Indiana State Rep. Jackie Walorski led over 100 supporters today in the Elkhart County 4H fair parade demanding that the Indiana Property Tax crisis be addressed. All options should be addressed, but they MUST be long term and permanent and solve this problem.

Property Tax Protest in INDY

2007-07-16T08:15:00.000-07:00

What is being called the "Black Sunday protest" by the IndyStar had 1000 protestors in Monument Circle by 10:45 Sunday. See the story here.

What will it take to get our elected officials, who are supposed to be representing us, to wake up and fix this problem? And not with a band-aid either; we need surgery. We want a permanent fix.

Average Elkhart property taxes have gone up about 34%

2007-07-11T21:38:00.000-07:00

Fox 28, in South Bend, reported this evening on the property tax crisis that is hitting Elkhart County.

Many homeowners are opening their tax bills and are finding an unwelcome surprise.On average, property taxes have gone up about 34 percent. And people living in Elkhart County have been hit particularly hard. State and local leaders are looking to the legislature for an answer to the problem. And while they may not all agree on how to fix it, they all do agree that a solution is urgent. Rep. Jackie Walorski says, "The system's not fair and it's out of control. People are starting to realize that the system's broken and while we have the momentum, now's the time to change the tax system in the state. I know it's solvable. I happen to prefer the elimination of property taxes

Rep. Walorski: "This tax system does not work"

2007-07-09T18:16:00.000-07:00

Indiana State Rep. Jackie Walorski (R-Lakeville) called today for real solutions to a real problem: the Indiana Property Tax crisis.

"We need the leaders of our state to convene a panel of experts from IU and Purdue and from the fiscal tax institute and from the think tanks in this state that gives us as legislators concrete options to change the taxation system in this state,” Walorski said. "This tax system does not work.”

WSBT notes, "Hundreds of Hoosiers agree." I would say thousands, and when everyone finally gets their property taxes later this year, there will be tens of thousands!

Walorski is in the process of having this letter delivered to Speaker Bauer, President Pro Tem David Long, Senate Minority Leader Richard Young, House Minority Leader Brian Bosma and Governor Mitch Daniels.

All our dear friends in the Statehouse better listen up to their employer and do something about this problem if they want to keep their jobs. Keep up the good work Jackie!