Senator Brendt Hershman writes a Guest Column to the Journal and Courier. He takes issue with a series by the J&C on property taxes which he calls incomplete.
He says, essentially, that State Government has done its part to cut spending and balance its budget; now it’s time for local government to do its part.
Arguing over state taxes and local taxes is like asking which is more expensive, paying for lunch out of your right or left pocket. Regardless, it’s all your money. The simple truth is that the tax burden on families is rising while incomes have not.
This is disingenuous. State and local discretion over spending and taxing is not equal. The state has strictly limited local government’s ability to raise taxes. Furthermore, the state imposes financial obligations on local government. For example, the State requires local government to pick up the tab for juvenile detentions ordered by State judges. Simply put, the State has wide discretion in determining what spending obligations it will undertake. Local government does not. The State has wide discretion in determining how it will pay for its obligations. Local government does not.
For decades, the State has compensated for this imbalance by picking up the tab for some of local government’s obligations. It did this in the form of property tax subsidies. Now, the State has decided to shift the revenue previously used for property tax subsidies to pay for some of the State’s other obligations. Local government has to fill the hole somehow, and property tax is the primary tool the State has made available to local government. The Indiana General Assembly balanced its budget on the backs of local government, making Senator Hershman’s claim of “left pocket, right pocket, it’s all the same” a little hard to swallow.
His argument would work, I suppose, if the State Government had:
1. Cut the property tax subsidy;
2. Cut State taxes in an amount equal to the property tax subsidy; and
3. Implemented a local tax in an amount equal to the property tax subsidy.
But that didn’t happen.
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