Michael Malik, writing for the Indianapolis Star, has an article entitled In a huff over tobacco tax hike. The General Assembly, at the urging of the Governor, increased the cigarette tax to fund a health program for lower income Hoosiers. The tax increase kicks in on July 1. The immediate effect is that smokers are loading up on their drug of choice before the price increase. Fortunately, there is always Kentucky. One person interviewed for the article indicated his intent to smuggle cigarettes from our neighbor to the south every six months.

I guess stockpiling is a somewhat rational response to the situation. The more rational response would be to quit smoking, though I realize nicotine is insanely addictive. Some of our fellow citizens have effectively been stripped of their free will by the drug. Given their helplessness, it’s probably a little unfair to tax them based on their use of the product. On the other hand, I have a strong bias against cigarette smoke, born of long family trips stuck in the back of a station wagon where the smoke reached the back seat, but the air conditioning never did.

Niki Kelly has a story on the recent Legislative Council meeting entitledToll Road off table for panel’s priorities. The Council declined to authorize study of certain problems surrounding the toll road lease, but did authorize other topics, including:

•Imposition of the death penalty on the mentally ill

•Vehicle crashes involving commercial motor vehicles

•Various annexation issues

•The use of judicial mandates

•Evaluation of economic development incentives enacted in 2001

•Whether the Indiana Gaming Commission has the authority to grant permission for riverboats to operate on barges

•Confined feeding operations

The first meeting of the Legislative Council for the 2007 interim will take place on June 6, 2007 at 1:30 in Room 404 of the State House.  The Legislative Council is the executive body for the General Assembly. This meeting will primarily be for the purpose of charging the interim study committes with their duties. Also on the agenda is a status report on the search for a permanent executive director of the Legislative Services Agency. The former director of LSA, Phil “Satch” Sachtleben resigned prior to the 2007 General Assembly. John Rowings, director of the Office of Bill Drafting and Research stepped in to fill his shoes and has been the acting executive director. If memory serves, Satch was “acting” executive director for 30 years, give or take, before being given the permanent position.

Everybody’s favorite economist, Larry DeBoer, has column entitled Capital Comments which appeared in the Carroll County Comet. As always, he does a good job of explaining the implications of legislative tax policy.

Again, he explains why the increase in local taxes. First, property taxes on inventories will be eliminated in 51 counties this year. That means the tax burden shifts from taxpayers with inventories to other taxpayers. Another policy change is trending — updating assessed values each year to keep up with changing sales prices. Since they’re playing catch up this time around, 1999 sales prices are being “trended” to 2005 selling prices. In the future, this should make for more gradual assessment changes, but this year it can be rather jarring. Prof. DeBoer says that so far it looks like home assessments are being trended upward a lot more than business assessments, thereby shifting the tax burden toward homeowners.

He notes the legislative Band-aid solution this year — “racino” income. Race tracks are paying big bucks for the right to have slot machines. The racino licensing money is being used to subsidize property taxes, thereby lessening the increase. He pointed out a practical (in addition to the political) reason for the much maligned rebate strategy. Instead of just reducing tax bills with the race track subsidy, the legislature required that homeowners get a rebate in November or December. The practical reason for that is that the the State won’t have the casino money until then.

Prof. DeBoer goes on to look at who wins and who loses under various new taxing options given to municipalities by the legislature. First, local government can use an income tax of up to 1% that would be used as a dollar-for-dollar offset of property taxes. The local government has three options for distributing revenues from this tax: a) for all property owners; b) for homeowners only; or c) for homeowners and rental-housing owners.

Under option “a” – all property owners, all property taxes would go down about 20%. Renters and employed homeowners would see their income taxes rise more than their property taxes were lowered. Farmers, retired homeowners, and corporate businesses would pay less overall.

Under option “b” – just homeowners, homeowner property taxes would be cut by about 50%. Almost all homeowners would see their overall tax burden reduced. Other property owners who earn income in the county would pay more.

Under option “c” – homeowners and landlords, homeowner taxes would drop by 1/3 and most would see an overall reduction in taxes.

[tags]property taxes[/tags]

Lesley Stedman Weidenbener has an article entitled Respect marks General Assembly which notes how much more smoothly the 2007 session went than expected. You had a 51-49 Democratic majority in the House, a new president in the Republican dominated Senate, and a Governor known for shooting off his mouth about Democrats (“car bombers” anyone?)

Instead, the session was marked by the Governor keeping quiet, at least in public, giving up a couple of things — privatization of the lottery and a couple of toll roads; compromising on some others — only half a loaf on full-day kindergarten because of resistance in the Senate. But, generally they got their work done without a lot of theatrics. The result wasn’t perfect, but it wasn’t horrible either.

According to a story at Stateline.org, only 6 states pay their governors less than Indiana does. The $95,000 paid by Indiana exceeds only the governors’ salaries in Oregon, North Dakota, Colorado, Tennessee, Arkansas, and Maine.

SEA 401-2007 amended the Governor’s salary, among others, so that it will change. Darned if I know to what it will change, however. Compare the current law:

The salary of the elected officials of the state is as follows: (1) For the governor, ninety-five thousand dollars per year.

Simple, right?

The new law reads as follows:

(a) Subject to subsection (b), the salary of the governor is ninety-five thousand dollars ($95,000) per year.
(b) Beginning January 12, 2009, and on the second Monday of January of each succeeding fourth year, the salary of the governor is increased after any four (4) year period during which the general assembly does not amend this section to increase the governor’s salary.
(c) The percentage by which salaries are increased under this section is equal to the statewide average percentage, as determined by the budget director, by which the salaries of state employees in the executive branch who are in the same or a similar salary bracket exceed, on January 1 of the current state fiscal year, the salaries of executive branch state employees in the same or a similar salary bracket that were in effect on January 1 of the state fiscal year four (4) years before the current state fiscal year.
(d) The amount of a salary increase under this section is equal to the amount determined by applying the percentage increase for the particular year to the governor’s salary, as previously adjusted under this section, that was in effect on January 1 of the state fiscal year four (4) years before the current state fiscal year.
(e) The governor is not entitled to receive a salary increase under this section if state employees described in subsection (c) have not received a statewide average salary increase during the previous four (4) state fiscal years.
(f) If a salary increase is required under this section, an amount sufficient to pay for the salary increase is appropriated from the state general fund.

Buh?

I’ll just trot out the relevant Monty Python’s the Meaning of Life quote again:

Cleese (as teacher): Now, before I begin the lesson, will those of you who are playing in the match this afternoon move your clothes down onto the lower peg immediately after lunch, before you write your letter home, if you’re not getting your hair cut, unless you’ve got a younger brother who is going out this weekend as the guest of another boy, in which case, collect his note before lunch, put it in your letter after you’ve had your hair cut, and make sure he moves your clothes down onto the lower peg for you. Now,–

Student: Sir?

Teacher: Yes, Wymer?

Student: My younger brother’s going out with Dibble this weekend, sir, but I’m not having my hair cut today, sir.

PUPILS: [chuckling]
Student: So, do I move my clothes down, or–

Teacher: I do wish you’d listen, Wymer. It’s perfectly simple. If you’re not getting your hair cut, you don’t have to move your brother’s clothes down to the lower peg. You simply collect his note before lunch, after you’ve done your scripture prep, when you’ve written your letter home, before rest, move your own clothes onto the lower peg, greet the visitors, and report to Mr. Viney that you’ve had your chit signed.

The National Conference of State Legislature’s blog, The Thicket, looks at Indiana in its sine die series. And, I had already decided to link to the post before I got to the end where they’re kind enough to give me (and TDW) a link.

There. Don’t say I never agreed with Gov. Daniels about anything. Mary Beth Schneider of the Indianapolis Star has the story of Gov. Daniels veto of SB 490, the interior designer registration legislation. I have expressed my opinion of this bill earlier this year and in past years. See 2/27/05 and 1/3/06.

Of the veto, Gov. Daniels says:

Daniels, though, called the bill “an example of government intrusion into the private marketplace, unnecessarily expanding the power and reach of a professional regulatory board (of which we have far too many already) and protecting the ‘ins’ at the expense of would-be competitors.”

. . .

Daniels, whose veto message to the legislature took up about a page-and-a-half, said he was writing at length “to make plain to the General Assembly my concerns about this (regulatory) trend and my deep skepticism about the merits and values of many of these efforts.”

I looked briefly but could not find the text of the veto message immediately. It passed the House 62 to 34 and the Senate 43 to 5, so if the General Assembly cares to, it could easily override the veto next session. (See Art. 5, sec. 14 for more information on the veto and override process.)

[tags]SB490-2007, licensure[/tags]