Mary Beth Schneider, writing for the Indianapolis Star, has an article entitled “7 hours makes it clear: People want tax relief”. Apparently the people, they don’t like paying taxes. In other news, I’m pretty sure my 3 year old doesn’t care much for broccoli.

The report discusses people’s complaints about how heavy their tax burdens are. And that’s fine. The fact that taxes have shifted to particular people at an unsustainable level is something that needs to be dealt with. But I don’t get the sense that these folks understand that government spending has not increased nearly as much as their tax burden has. I don’t get a sense that these folks are thinking very much about which government services to cut or to whom their tax burden should shift. Their thoughts seem to be like someone touching a hot stove: OUCH! MAKE IT STOP! Again, a legitimate response. But we all have to take a look at who turned on the stove and why. We don’t just demand that someone shut off the power.

David Bottorff, executive director of the Indiana Association of Counties and Towns, has a column explaining that the counties are not particularly responsible for the spike in property taxes. First, he explains that venting in the county treasurer’s office doesn’t do you a lot of good. You should go to someone who can do something about your problem.

If taxpayers want to complain about spending, they should attend a meeting of a local fiscal body that can actually do something about it. If your property assessment needs adjusted, you should contact your county assessor. If you need to file an exemption you should contact your auditor.

He also explains that county operating budget increases are capped at 4% per year. This increase is offset to some extent by increases in assessed value so tax rates generally remain flat or increase by a rate less than 4%. Capital projects can cause increases in property taxes – but these are subject to remonstrances. County taxpayers have the opportunity to object when these projects are proposed. That’s about the extent of the county responsibility.

“Trending” is another reason for the recent spike.

Trending, or annual assessed value increases, increased the taxable assessed value of homes for taxes payable this year. For neighborhoods with increasing home values, the tax liability is expected to increase. This year homeowners experienced the result of having several years of increased home values hit all at once. Such adjustments will now be made on an annual basis.

The legislature also exempted inventory from taxation. This results in a shift of the tax burden from businesses to homeowners. This might make sense from an economic development standpoint, but it’s still an increase to residential homeowners.

Mr. Bottorff makes the following recommendation:

Repealing property taxes is not the answer; however, reducing the government services that rely on property taxes has merit. There are some services that are more appropriately funded through a statewide tax, such as the school general fund or protecting children from abuse and neglect (family and children property tax fund). These types of services reflect state policies and not a local policy.

It makes plenty of sense to suggest that state policies should be paid for with state taxes.

The Governor has ordered reassessment of Marion County’s real property. In the meantime, Gov. Daniels has enlisted former Governor Joe Kernan and Supreme Court Chief Justice Randall Shepard to head up a commission to “find long-term solutions to the property tax crisis, including the possible elimination of township-county assessors and other government streamlining ideas.” Gov. Daniels hopes to get the commission’s report by December. The Governor has also apparently instructed Marion County property tax payers to pay their 2006 level of tax as opposed to what they apparently owe in 2007.

A couple of observations: First, as Advance Indiana points out, this would seem to create a potential conflict for Justice Shepard if some of his recommended legal changes get adopted, then challenged, then reviewed by the Indiana Supreme Court. Second, does anyone know where the Governor gets the authority to order reassessment for Marion County and to freeze Marion County tax payers’ bills at the 2006 level for the time being? I assume he wouldn’t do anything this monumental without having solid authority, but it seemed like a relevant question. Also, is Marion County in risk of defaulting on anything important as its tax revenues are being dried up – first by the elimination of the inventory tax, second by the reduction of payments by the State in the form of the property tax replacement credit and homestead credit, and third by the Governor’s tax freeze on Marion County property tax levels?

In a post entitled, Sir, The Taxpayers Are Revolting, Doghouse Riley gives us a brief history of our current property tax situation:

There’s a fairly straightforward explanation for what’s happened to Indiana’s property taxes: the state Supreme Court found the assessment system unconstitutional; successive state legislatures found it more prudent, from a re-election standpoint, to punt the issue; a single-party gained control, including an incompetent, self-aggrandizing Governor who used the budget process to make himself look good; and most directly, the ill-considered abolition of the business inventory tax with no specification as to its replacement. Yet there’s a continual drumbeat of “don’t point fingers, just solve the problem,” notably from the Indianapolis Star, as well as other Daniels die-hards who realize their man has fucked up Big Time. Daniels, who has been lauded–by no one so much as himself–for his “fearless” leadership, simply refused to have anything to do with the issue, hoping, perhaps, that astronomical local tax increases would gnaw a chunk from the man once considered his most likely ’08 challenger, Indianapolis mayor Bart Peterson. Now he sits on a state budget surplus, not to mention what he’s raked in selling off taxpayer assets, and does his best Hamlet–assuming Hamlet was played by a 58-year-old with a comb-over (which he sometimes was) and assuming he tried to get his picture in the paper every day (which he didn’t).

[tags]property taxes[/tags]

Let me make sure I understand this. For many, many years, the State recognized that it imposed numerous burdens on local governments without giving those governments sufficient taxing flexibility. This recognition came in the form of the property tax relief credit and the homestead credit — these State subsidies reduced property taxes. Then, in 2005 and 2007, these credits were reduced by the General Assembly, effectively balancing the State budget on the backs of the counties. Reduction of these credits is a significant part of the huge property tax increases. So now we find out the State is projecting a billion dollar surplus.

This is not a case of those dumb counties outspending their means only to have their hand out when the fiscally responsible State has a surplus. Nope, these jacked up property taxes are directly related to the State surplus. If the State had not reduced the property tax replacement and homestead credit, the surplus would be less and so would the necessary property tax increases.

I could run a surplus too if I had the power to stop paying for the the things I demand.

At least that’s the way I see it. I’m not a tax expert. I welcome evidence that my analysis is flawed.

The Indy Star had a stub entitled Politics on the Web:

A few other useful Web sites: If you’re more interested in political spin, look at the sites of the political parties. Democrats can be reached at www.indems.org; Republicans at www.indgop.org ; and Libertarians at www.indgop.org .

Either the Libertarians have been fully co-opted by the GOP or they continue to get snubbed.

The Fort Wayne Journal Gazette has an editorial that, among other things, suggests that the Bureau of Motor Vehicle is breaking the law in its practices with respect to distributing the “In God We Trust” license plate. It appears that the BMV is distributing the plates without requiring an application required for the specialty plate.

IC 9-18-24.5-4(1) says:

A person . . . may receive an “In God We Trust” license plate . . . after doing the following: (1) Completing an application for an In God We Trust license plate.

IC 9-18-2-9 further requires the Bureau of Motor Vehicles to “use due diligence in examining and determining the genuineness, regularity, and legality of” any application.

By sidestepping this bit of red-tape, the BMV is giving every indication of preferring the message on this specialty plate over other non-religious messages. This appearance is compounded by the fact that the BMV’s practices with respect to the IGWT plates is costing a fair amount of money:

The emphasis on distributing the specialty plate is especially puzzling considering the agency’s recent efforts to control costs. The “In God We Trust” plate costs more to make than the blue-and-green standard tag – 50 cents more per plate, to be precise. With 824,504 “In God We Trust” plates distributed as of last Saturday, that’s an additional $412,000 the agency has spent on plates. Six months into the year, that takes a hefty chunk out of the $1 million annual inventory cost savings the BMV boasts will be realized by replacing the one- or two-digit county indicator plates with a county sticker.

I’ll go out on a limb here and say that I don’t think a government agency should ignore legislative requirements and waste taxpayer money to promote a religious message. I suppose that makes me a radical of some sort.