The State balances the budget on the backs of local government and then state politicians rush to get out front to offer tax refunds based on the “surplus.”
Under Daniels’ plan, outlined Tuesday, anyone who filed a state income tax return would receive a credit on the following year’s return if state revenues came in above a predetermined level.
The Republican governor suggested that level should be 10 percent of the money needed for the next budget year. Any credits, which would be subject to the legislature’s approval each year, also would depend on whether enough money was being preserved to protect the state in case of a downturn.
The State’s current fiscal health is directly related to the distress in which local governments currently find themselves.
Jill Long Thompson doesn’t think Daniels goes far enough.
She has proposed returning the state’s current surplus to taxpayers by suspending the state sales tax on gasoline.
“I’m glad that he finally responded to my repeated calls for tax relief for Hoosiers,” Long Thompson said. “But I think Hoosier families in many communities are economically stretched now, and the governor has the authority to suspend collecting the Indiana state sales tax on gasoline, and that would give immediate relief.”
Long Thompson said that when she was in Washington, she never voted for legislation that included a new tax or a tax increase. Daniels, she said, has sought multiple tax increases in his four years as governor.
This exchange makes me pessimistic that Long Thompson will close the gap to overtake Daniels at the poll. She apparently is not questioning the manner in which the “surplus” was generated. Under Governor Daniels, the state has been rather heavy handed in its interactions with local government. Long Thompson does not appear to be tapping into this reservoir of ill-will. Instead, she seems to be trying to out “tax cut” the Republicans, criticizing Daniels for his, frankly, good ideas to impose a temporary tax on those with incomes greater than $100,000 and cigarette taxes devoted to health programs.
Lower taxes are good, but good government programs often bring greater value than those tax dollars paid in. For example, the portion of my tax dollars attributable to building and maintaining roads are far more valuable to me in the form of roads than they would be in the form of a few extra bucks in my pocket and no roads. Same goes for the drainage systems that take water away from my property, the courts that allow me to enforce my contracts, etc. etc.
I just think that Long Thompson is embracing Republican electoral frames which will make it very hard for her to beat Daniels.
I agree that the state surplus comes by putting more burden on the local governments. However, is Daniels still right?
Honest question: Has the state been paying for things that are only of local benefit, and has now gone to only paying for things that are of benefit to the state as a whole?
This may be painful for local governments, but it may also be needed. I don’t think the state should pay for local things, and now local governments will have to decide what programs are of benefit to them to keep.
I can’t speak specifically to Indiana’s issues,but it seems a familiar scenario: a state cuts state taxes and makes government ‘smaller’ and everyone ‘keeps more of their incomes’, but there is never any mention of cut local budgets along with diminished local and state programs. The retort to local and state always is,’cut the programs if you can’t afford them’,as if that is a viable choice.It’s as if there is a complete denial that lowering taxes cuts programs ( which do vary one from the other and can be examined).Only ‘government’ is ever cut and that is always good because government is always bad. It’s always been such a false misleading argument that ‘government is bad so cut it’,and beyond that no further action is required.
At the same time the state is cutting taxes the federal goverment is cutting revenue going to states,already telling the states to assume more of the burden even before state tax cuts.
This kind of dead end rhetoric ( along with their social issues agenda) is what has really turned me off to today’s brand of conservatism.It’s all process with no examination of specifics.Only the process( or sales pitch) is ever revamped.
But I’m just an oldish, retired guy living off my government pension with few monetary problems.Fortunately I didn’t have to rely on promised private benefits to retire : the government has to deliver..the private sector can just cancel promises.
Proposals to suspend the gas tax are disappointing, since it is one of the rare taxes that makes any sense. The tax funds the roads you use the gas to drive on. Your level of taxation is somewhat proportional to the amount you’re using those roads. If you’re not using the roads, you’re not paying the tax.
Meanwhile I’ll be taxed heavily now and in future years for an Iraq War I was never in agreement with, along with many other things that don’t really benefit me much, if at all.
Yeah, save me from those pennies of gas tax. Thanks a lot.
Doug, you named three things government does. Now, I agree that all three of those are things that government should do. How about some of the questionable things? Do we need a Hoosier Lottery or Gaming Commission? Do we need a Department of Tourism? Should we be guaranteeing loans to select businesses? Can we get rid of ISTEP? Maybe we can do without permitting to be a grain dealer. Is it the state’s job to issue crop reports?
I have to tell you, I don’t get any particular value from any of these things. I doubt any of your readers do. So, why? Indeed, why don’t we ever hear about these things? Why aren’t they worthy of a good chopping, or even elimination? What is the profound benefit they cause?
Lou- government officials only ever put genuine essentials on the block, because the people recognize them as such, and then recoil against all cutting- just as the officials had it designed.
Some good points as always by all—BUT, statements about state funding local projects?????as a locally involved person that simply does not calculate. What the new 1001 does was very simply cut what the locals could raise to support their programs. There has been no cut in income taxes or sales taxes some of which the state does revert back to locals. AND if the state mandates things should the state not fund the same—on this topic could generate a long list of state mandated items that the locals never received any funding to impliment and operate. Schools are an excellent example—required by state or federal to do this and this and this but local tax payers were in the past required to find the funding. Sewage treatment, reports by all local agencies (currently the DLGF seems hell bent on requiring so much paper work to approve the local property acessments that county governments are unsure what the cost will be and then they may change needed info again and again)and the list could go on and on. Indiana is a home rule state by law but not much in the way of function.
Partial answer to Mike Kole: One of the roles of government is oversight that is believed to not be handled properly by private sources—examples: crop report—primarily a USDA funded situation but the intent is that all affected parties including producers, very wide variety of processors, and even to retailers who are contracting for future deliveries or planning whatever do have the correct information. Crop reports also may deal with insect or disease concerns that again are of concern to all the above parties. In Indiana crops are a major source of business–from production right to the retailer of whatever. Mega Million Dollars
Gaming Commission: if Indiana is going to be a gambling state then there better be a gaming commission or back we go the hey day of Las Vegas.
Oversight of grain dealers: please just check the number of grain dealers who went under owing money to producers and suppliers due to inadequate funding or bad practices even illegal ones, etc…The annual concern is in the millions and for a given producer or supplier it may mean the end of the line for their business.
ISTEP—whether one is for or against –it is a fact of the Indiana Code that the state is responsible for the education system.
And the beat could go on.
Can we go to the heyday of Vegas? There has been a bit of growth there. How’s this regulation assisting our ‘growth’?
I’ll donate my whopping $9 refund to the local food pantry. Sheesh! I can’t believe the level of pandering from both candidates.
Here’s a good scam to escape property taxation. Buy some woods (at least 10 acres), then apply for classified forest. The DNR loves the program and you only have to pay $1 per acre per year in real estate tax. You can leave the property to your kids or you can sell it without altering the classified status. Your neighbors pay for the shortfall to schools, emergency services, etc. Our county now has almost 16,000 acres in the program. This is an even better deal than the farmers get at their far less than market value subsidized assessment rate. Not that I’m complaining about farmers, I like to eat as much as the next person.