I’ve beaten up on the Palladium-Item pretty good in the past. But, today they have an editorial that’s spot on, in my ever so humble opinion. They criticize the General Assembly for getting tough on other government’s taxes. Specifically, they are critical of the General Assembly’s decision to restrict the ability of local governments to raise property taxes without providing local government with an alternate means of funding schools, parks, and all the other local government services.
The trick to achieving success will be to make any local government finance reform proposal simple and productive, something that legislators long accustomed to micromanaging local governments in Indiana will find hard to do.
In lieu of traditional property taxes, provide local governments a host of sales or income tax options or user fees that best suit local needs.
And if local officeholders overuse or abuse their new, alternative spending authority, local voters will show them the door.
That is how it can and should work.
I might just add that fewer unfunded mandates coming out of Indianapolis would also be helpful to local government.
There is only one solution to the problems we have in Indiana. Cut government spending. No one in The Democratic Party or in The Republican Party is willing to cut spending in any meaningful way.
We should implement a three step plan:
One
We need to slash government spending at every level. EVERY Department Head should be required to slash his or her budget by at least 1% across the boards next year. If the Department Head fails to slash spending then appoint a new Department Head.
Two
The next step would be too separate The State government as much as possible from the local governments as far as funding goes.
If the State mandates it the State would be REQUIRED to pay for it.
We should take about 2/3 of all sales tax revenues that are collected each year and we should funnel them DIRECTLY to the local governments. This could be done very simply. Just use current census data. For example if we collect 900 million dollars in sales tax in a given year we should give 600 million dollars in sales tax revenue DIRECTLY to the local government entities. If current census data for that year indicates there are 6 million hoosiers then each County would receive $100 of revenue from the sales tax for each citizen.
It would be critical to keep anyone from changing this fomula, nothing could be more fair then distributing it by population.
Each County would have to meet with its local taxing districts and they would have to split the money up between Schools, County, City, Fire, etc.
The State Property Tax Replacement Fund would be abolished. This would help get the State out of each local government’s business.
Three
Each locality should be given the ability to raise certain taxes. Each tax increase should require a majority of local voters to approve it.
This would solve many of Indiana’s problems.
Mike Sylvester
Mike Sylvester,
You said, “nothing could be more fair then distributing it by population.”
I can think of something — distributing it by population after correcting for the distorting effects of prisons.