The Evansville Courier Press wrote an editorial endorsing The Daniels Plan. To recap, The Daniels Plan calls for a 16% increase in the state sales tax (from 6% to 7%). In return, it caps property taxes at 1% for owner occupied residences, 2% for rental residential property, and 3% for all other types of properties. To accomplish these caps, a Constitutional amendment would probably be necessary to allow treating different sorts of property in an unequal fashion.
The plan further calls for shifting the remainder of school operating costs to the State and do the same for child welfare expenses. A new level of government, a tax board, would be created for the approval of spending plans (isn’t that what a County Council is for? Perhaps I misunderstand this part of the plan.) Elected township and county assessors would be replaced by one appointed, professional assessor who reports to (I believe) a state division for overseeing assessment. Each major building project would have to be approved by a public referendum.
I don’t think this plan is all bad, but what I find that I keep getting annoyed with is the fact that this has become an “emergency” in significant part because Marion County doesn’t seem to have taken steps to mitigate the problem that has been coming for awhile. Here in Tippecanoe County, it seems like the county officials have worked hard over the past several years to limit the fall out. Among other things, they kept the county budget in check and they imposed a county income tax to offset the lost revenues from the elimination of the inventory tax. Maybe it’s just Indy-envy of some sort, but it’s annoying that Marion County’s problems have a way of becoming the State’s problems.
Update Meanwhile, the South Bend Tribune has a few questions. (H/t Blue Indiana).
# All public school operating costs would be paid by the state under the plan, rather than by local property tax. That may be good, but wouldn’t it also remove some local control over local schools?
# The plan would increase state sales tax by 1 percent, to help reimburse the state for its assumption of child welfare and school costs. Indiana’s sales tax would be higher than the sales taxes in the four neighboring states. How much would this hurt businesses near the state lines?
# Although tax on owner-occupied homes would be capped at 1 percent, the tax on landlord-owned properties would be capped at 2 percent. Undoubtedly that difference would be passed on to tenants of rental properties. So, in effect, wouldn’t renters be paying more property tax than homeowners? Is that fair?
# The tax levels would be constitutionally capped, so it would be of utmost importance to get the math right the first time. Would the loss of revenue caused by reduction in property tax truly be offset by reduction in local government and school system operating costs? That is an especially pertinent question in counties such as St. Joseph, where there are a large number of properties that are not subject to property tax.
Doug,
I agree that much of the plan is very good. It’s idiotic to think in this century that we need elected assessors at a township level– or for that matter elected coroners or recorders or clerks..
But I very much dislike the idea that EVERY building project will be subject to a referendum. We have a cumbersome, but well-oiled process now that has been successful in many towns of stopping major projects. Elections are also good ways to slow down processes. But if there has to be money spent campaigning every time a new school is to be built.. there will not be another one in Tippecanoe County in a long while.. while kids are squeezed into smaller spaces. (IF that meant that TSC would give the West Side kids back to WLCSC, that might be worth it.) Ohio has a similar system and they are way behind in many aspects of education.
Yes, Indy has a big footprint.. and I don’t remember talk of constitutional amendments when Lake County howled a couple years ago. But what can you expect from a Central IN Gov… who likes to play hokey on the county fair circuit?
As a Lake County resident, I can say that we have been in major trouble since 2002. It was one of our citizens who caused this whole mess! Our biggest problem now is that the communities have NOT curtailed their spending (unlike Tippecanoe county). And yes, Marion county did not listen to us the last time–and are now only listening to us grudgingly–because both counties are in the same boat.
Mitch’s plan is getting a lot of support up here.
Doug, I thought the appointed assessor was chosen by and reported to the counties, but had to be licensed by the State as acceptable. Given we’ve got assessors in Johnson County assessing houses as being worth less than what they’re selling for I’m not entirely opposed to the development.
I expect to see the referendum mechanism on local building projects to go away somewhere between now and the time it returns to the governor’s desk. Doesn’t strike me as something crucial to the success of the bill. I do wonder if it’s cheaper/easier than the current process – anyone know?
You can bet, though, that will the State taking over funding of schools that local governments will lose control, and it wouldn’t surprise me if, say, the state mandated (say) less administrators than many schools currently have. I expect this issue to become bigger over the winter, though I’m unclear as to how it will be resolved.
Riddle me this – I thought Mitch Daniels was a tool of big business and selling the state. Then Daniels comes out with a tax plan that has business howling. What gives?
I’ll just posit a conspiracy where Mitch is going for a sort of Sister Souljah Moment. Big Business probably doesn’t like the plan very much, but realizes something has to give and this plan doesn’t hurt them all that much, really. So, the sides agree to publicize their disagreement. The business owners feel like their lobbyists are really working for them. Daniels gets to look like he’s (finally) protecting the little guy despite the disapproval of Big Business. Daniels gets re-elected, the lobbyists keep their constituents happy, and the gravy train keeps flowing.
Probably I’m just being too clever here.
Well, he’s a politician thinking about re-election. That kind of conspiracy happens every 4 years.
I’m waiting to see what the Democrats will do in the House … what they’ll offer in addition/subtraction/etc.