Abdul has a post up on the subject of tax caps imposed on local government wherein he minimizes the concerns of local officials.
Most of them will complain that the caps will hurt their budgets and they will have to cut police and fire. As much as I respect local officials, I truly wonder if any of these guys get it sometimes. The purpose of the hard caps is to protect the taxpayers from huge shifts in their tax bills.
And the money the local officials spend is the taxpayers’ money. It is not their money! When property taxpayers were up in arms and many seniors were afraid of losing their homes over high tax bills, where were these officials? What were they doing to stem the tide of fear and dissent? A lot of them were nowhere to be found. But now they are crawling out of the woodwork (especially the schools) to keep their hands on the taxpayers’ hard-earned money.
One issue I have is that nothing protects local government budgets from huge shifts in funding and duties. This property tax spike came crashing down on us when State officials shifted tax burdens onto local property tax rolls. They eliminated the inventory tax and shifted those burdens to property taxes. The State Supreme Court struck down the previous assessment system, shifting burdens from businesses to residential tax payers. The State General Assembly balanced its budget at the expense of homestead and property tax relief credits. Now the Governor, at every available opportunity, falsely blames the property tax spike on increased local spending. The primary tool made available to local governments to ameliorate these state-caused property tax increases were to allow local government to raise local income taxes. You saw how well that kind of tax increase worked for Mayor Peterson.
So local officials have every right to complain. They have no reason to trust the State to do right by them. The State has deprived them of resources and increased their burdens. To add insult to injury, State officials have pushed tough political decisions to local officials. Raising an income tax makes voting on the proper time zone look as innocuous as passing a resolution honoring the local girl scouts.
The taxpayers are not, by and large, fully aware of this dynamic. All they know is that their tax bill went up, and they aren’t getting anything more for their tax dollars. So, I disagree with the notion that taxpayers are making a fully informed decision to do with less fire and police protection in exchange for lower taxes. I don’t get the sense that the analysis goes that far. There’s a vague notion, fueled by the Governor, that these local governments are wasting money and that if we only cut this unspecified waste, tax bills would go down. I don’t get the feeling taxpayers, by and large, envision doing without any of the services they want and need. And who is going to take the political hit when crime rises, fire protection is slow, trash builds up, the schools get run down, the courts back up, or whatever? It’s not going to be the Governor.
Syllogism
1. Liberal logic: Poverty causes crime
2. Fact: High taxes cause poverty by depressing the economy
3. Conclusion: High taxes cause crime that require more police that require more taxes that causes crime that requires more police that requires more taxes…
Truth be told, most Indiana municipalities can meet the new tax caps fairly easily. They’re not cities, they don’t provide a lot of serices anyway, they’ve got a COIT, and they’re under the 1% cap already.
And then you have the cities of northern Lake County. They provide WAAAAY too many services (Hammond will pay for your kids to go to college, for example). There’s no income tax. The average home is assessed at less than $100k. Yes, they have the casinos, but for whatever reason, they don’t use the revenue for operating expenses. They use the money for pork. In Hammond, each city council member has a slush fund of $325k to do whatever the hell they like with.
Anyhoo, the bottom line is that cities that provide fire service with paid firefighters are probably an endangered species. They can’t meet mandated services without revenue beyond 1% of assessed value. But most other places are going to get by just fine.
Kenn,
But just cutting taxes doesnt do any good.
Tax cuts have to be targeted and specific.Cut taxes on retirement income for example on pensions and SS would be a good start to improve the lives of us retired folk. Double or increase the deduction for real estate interest write-off would be another huge boost for the middle class. How about making all health insurance payments tax deductible? How about college tuition? Across the board tax cuts just serve to make government less efficient for those who need government services. Who needs government services? My father raised a family with 4 kids,2 parents, and never earned more than $5,000 a year..granted this was in the 50s and 60s and probably would be maybe equivalent to no more than $20,000 yearly income now.Tax cuts don’t help this kind of family whatsoever. ‘Trickle down’ economics ,if it happens at all, never reaches families like this.It’s been a secret that even today there are a huge number of families earning less than $30,000 a year supporting children and 2 parents or one parent. In the past a $30,000 full time job would have included family health insurance so $30,000 today is much less than it used to be.These people need any govt help they can get.Cutting taxes to make government smaller in the mindless way the Bush administration has done makes poverty worse,not better.That’s why from my point of view, today’s american conservatism has no credibility.Many of us are waiting for a new Enlightment.
Enlightenment
Doug, I would agree more with your assessment than some of the other postings. No doubt, every governmental unit can cut something, but making really meaningful cuts without reduction in services to the public, higher personnel turn over, etc. likely will not be possible for many units. I have served on both the county and town council–the budgeting process in very complex and the state mandated things as well as record keeping requirements require a large portion of every budget and have to be put in place first–no choice. These can not be cut. As with any service oriented business the pay portion of the budget is a major item—but how low can you go when turning over law enforcement duties to low pay offered candidates or putting an expensive piece of equipment into the hands of the lowest pay possible person. How about running utilities (sewer)with the lowest paid person who will take the job of overseeing a multi million dollar facility.
Would some of the persons receiving SS or other retirement be willing to take a cut in order than the tax burden could be reduced. As a retired school teacher—should I be willing to take a cut in SS and teacher retirement (which the state currently runs a major debt burden.) As a resident of my community—do I expect the snow to be plowed timely, sewage to be treated properly, police on call if needed, EMS there quickly with enough resources to save me from lasting damage from a heart attack, etc. etc. Schools that will allow my grandchilden to compete in an increasing complex world. Yes, I know I went to 1 and 2 room country schools and small high school—and truthfully when I entered college I was 2 years or more behind many students—and likely today could not even get admitted or survive.
It is simply not going to be possible to keep shifting taxes of all types to someone else. As stated many times–property taxes are not fair, not services received based, etc.—but challenge anyone to come up with a better system that will not have same concerns with demands such that have so many loopholes they fail to address issue.
Liberty begets prosperity.
Asses the nations of the world and the prosperity of their people. When government adheres to its role as referee (not player; not coach) people prosper.
Just one example: Before 1965 and the advent of Medicaid and Medicare, health insurance was inexpensive and health care was plentiful. Then government fixed it. The number of students applying for medical school has dropped dramatically over the past 30 years and the admissions standards have also declined. We have viewer health care providers and those we have are less qualified.
The other thing that many of the people clamoring for caps fail to realize is that there is a large group of people (I am one) who will be hurt by this legislation.
I am about 40% below the cap, I make enough money to pay income tax and I buy things. So when my local entities raise taxes to make up for the shortfall, I move closer to the cap, but still pay the full increase. When they raise income tax to offset the decrease in revenue, I pay the ful increase. When the raise sales tax to offset the shortfall, I pay the full increase.
Basically, I am in the same situation I am in now. I will subsidize people who own more valuable homes, make more income(no graduated income tax for Indiana) and can buy more stuff than me.
I am very excited.
Let’s just forget to talk about the screw job going on in regard to farmers.
The best solution is to begin with the federal government because that’s why the state and local tax issues are becoming so crippling for people. Asking the state and local government to cut spending is not understanding how government works.Cancel those mindless acrosss teh baord Bush tax cuts not yet effective and reverse the ones that have kicked in and then start over with trageted tax deductions basically as we always have had,but with updated emphasis. Corporate america with so many ties to international corporations have gotten everything they have asked for, or hinted for, in tax cuts from the Bush admistration and our economics are in shambles.So obviously something is amiss with our economic policies.Start cutting taxes at local levels or putting in tax caps then it’ll only get worse,as those above have so clearly posted. I live on pension, so no, don’t ask me to live on less money than I already do to save local and state government their pension duty.Go higher up before we start asking for sacrifices from the $50,000 a year and lower income people to bail out the system.
Kenn,
You blame Medicaid and Medicare. I blame the AMA for making doctor’s wages higher than they should be in a free market. “T” might have some insight that dispells or confirms that.
However, on this off-topic post, I think Lex Luther was wrong about land being the thing people will pay “through the nose” for. Everyone wants to live. A drowning person will push down on a lifeguard’s head for one more breath, and almost all people will insist on paying personally, by the goverment, or insurance for one more breath. Don’t underestimate that instinct’s effect in the cause for high health care costs.
Jason,
I don’t think Kenn is blaming anyone, really.
His posts have all the semantic content of:
Colorless green ideas sleep furiously.
repeated ad nauseam.
Who needs citations to peer-reviewed studies, or even newspaper articles, to back up one’s assertions? Just blather one’s conclusions without bothering to check one’s premises.
That’s what passes for logic among the political Right these days…including right-libertarians, evidently, if Kenn’s surname is as Gividen as I think it is.
Lewis Carroll spoofed this variety of unreason back in the 19th Century, but, really, who needs to read anything besides the King James Bible and Frederic Bastiat’s The Law?
I think Sen Kenley’s amendment was the best of the entire session. Under his amendment citizens can choose to exceed the cap by exempting specific projects. In this sense home rule really is expanded because I can now decide if I want a reduction in services or a reduction in taxes.
I don’t by the argument made by Sen Kruse and others that some how the citizenry is too uneducated or ill-informed to make this choice. We’re closer to the action – we know what we can afford. Just give us the choice…
In this sense home rule really is expanded because I can now decide if I want a reduction in services or a reduction in taxes.
Except that in many areas of this state the public employees are in control of the political process. The ammendment is a bad idea, and there should be no exceptions to the tax caps.
Buzzcut,
I don’t follow your logic. Either the people should have a voice in these projects or they shouldn’t. I fully believe the citizenry is capable of making decisions regarding their financial future. I don’t want some bureaucrat in Indianapolis deciding what’s best for my community…
I don’t agree. The public employees have more resources to throw at elections. They have more of a stake in the outcome of elections, and thus can get their candidates on every board of note.
For example, here in Lake County, our County Council President is a public employee. She has said flat out there will be no layoffs to deal with the coming tax cap.
She is a woman that can draw upon the resources of AFSCME to win elections. Little old me, with no “juice”, can’t compete against that.
But in Indy, AFSCME has less juice than, say, Eric Miller.