The Fort Wayne Journal Gazette has a decidedly more positive editorial in response to the LSA report on property taxes than did the Lafayette Journal & Courier. The Journal Gazette’s take is that the previous tax structure was misguided and undervalued certain properties, resulting in those property owners getting something of a free ride. They feel that, given the good news that most property tax owners weren’t hit by tax increases, the legislature should be given credit where credit is due so that satisfied Hoosiers aren’t drowned out by the disgruntled property owners.
A report last week from Legislative Services Agency showed that tax bills for owner-occupied homes increased, on average, only 4.3 percent because of the $800 million property tax relief package approved by lawmakers. In Allen County, almost 68 percent of property owners saw their bills decrease.
Why does it matter? Because lawmakers need to hear that they were successful in blunting the effects of the court-ordered reassessment and in restructuring taxes to foster Indiana’s economic growth. That message shouldn’t be drowned out by gripes from the handful of property owners who saw substantial increases because their properties were previously assessed well under their market value.
The danger is that pressure from those who had benefited from inequitable assessment practices will now lead legislators to tinker with the improved system. In fact, it’s already happened with agricultural property values. In the last session, the General Assembly lowered the base value of all Indiana farmland in response to a 5.7 percent statewide tax increase. Farmland isn’t based on a true market value assessment, but instead is assessed using a formula that takes into account soil quality.
One result of the adjustment for agricultural property will be higher taxes for homeowners and business owners, because local tax rates are based on how much schools, cities and libraries need to raise. If one property owner pays less, another pays more.
The Lafayette Journal & Courier’s take on the matter focused more on the fact that taxing duties, like fecal material, flows downhill. The editorial board there seemed upset by the legislature taking credit for not raising taxes and then the good news from the LSA report while keeping remarkably quiet about the extent to which local government would be forced to raise taxes to fund local government after the budget actions of the state legislature. Probably both editorial pages are correct. I think that shows the legislature probably did the right thing in 2002 but not in 2005.
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