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Constitutional Property Tax Enshrinement

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I assume the vote to carve the current property tax structure into the Constitution for future generations is a done deal, so I haven’t said much about it lately. I’m against it. We’re starting to see some problems with structured tax caps of 1% for residential property, 2% for non-residential rental property and agricultural property, and 3% for anything else – mostly business. But, good policy or bad policy, we’re looking to lock them in, removing flexibility for future generations when conditions change.

John Seidel of the Post-Tribune has a good article summarizing the current state of the tax cap situation. Abdul argues that because the General Assembly didn’t eliminate townships, future generations deserve to be hamstrung with respect to funding local government services. Or something.

Morton Marcus, meanwhile, argues against Constitutionalizing the tax caps. Rather than more government efficiency, the caps will likely result in deteriorating local services. The county option income tax the General Assembly provided as a replacement option isn’t all that great. Among other things, it allows only a tax on households and not business. This is just further degradation of local control; more and more local decisions have to run through Indianapolis. Marcus traces this back at least to 1973.

As far back as the property tax reforms of 1973, Indiana degraded local government and shifted power to state government. The legislature has increased its control of our schools. Cities and towns have become prisoners of the state in the tax wars. Libraries have been forced to defend their very existence.

Finally, the benefits of the caps are primarily enjoyed by owners of small rental housing units, commercial apartments and second homes (60%) with about 36% going to commercial and industrial properties. Only about 4% of existing cap benefits go to homeowners.

Marcus has the better argument, but Abdul’s side is going to win the day. Voters aren’t well informed about local government financing. They just hear “tax caps” and think, “yippee!”

Other than that, Mrs. Lincoln, how did you enjoy the play?

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I couldn’t help but think of that old Lincoln assassination joke when I read a paragraph in the write up about the shootings at the Black Expo in Indianapolis this weekend. Ten children were shot (fortunately with, apparently, minor wounds) on Saturday. (Also see Indiana Barrister).

The episode, marring what was described as an otherwise successful, 11-day Summer Celebration that drew hundreds of thousands to the city, prompted a host of questions[.]

I’m sorry. If 10 kids get shot, you can’t have an “otherwise” successful event; anymore than the performance at Ford’s Theater was otherwise successful the night Lincoln was shot.

The main incident apparently wounded 9 people; there was an unrelated incident, described as a “tussle” where a 15 year old who was in the group but not in the particular altercation got shot in the leg.

This is ridiculous. I don’t know what the problem is, specifically. I guess it’s not a black issue because most black people at the event were not involved in the violence. It’s not a gun ownership issue because most gun owners never shoot anyone illegally. But, that said, this sort of thing doesn’t seem to happen at, say, the gay pride events.

Officials said there was a simple formula for the violence: thousands of children unleashed without parental supervision and too many guns illegally owned and used.

One shooting victim was found with a .32-caliber handgun. Weapons confiscated separately from the shootings included a .22-caliber handgun, a 9 mm handgun and a loaded AK-47 assault rifle.

“I am mad as hell,” said Rev. Harrison.

“I am sick and tired of us making excuses for some of our young people. There was a lot of gang activity taking place. We need to deal with the real issues. Some of our kids are out of control.”
. . .
[V]iolence has found Summer Celebration’s final weekend before. In 2006, five people were wounded in two Downtown shootings. In 2007, two teenage girls were arrested after, police said, one fired a gun into the air.

One of the problems is simply adolescent males (of any race . . . or, looking at the animal kingdom, species, really). If we could somehow take weapons out of the hands of all males, ages 16 – 30, I imagine the damage done by assaults would drop precipitously. And if wishes were horses, beggars would ride.

I guess the take away from this incident is to supervise your kids, teach them guns aren’t toys, and keep them away from events with high concentrations of adolescent males.

Primary Season: Senate

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Primary season is in full swing and most of the action, at least for federal races, seems to be on the Republican end. I think I’m one of the few residents of IN-04 who isn’t running for Congress. There is also a lot of activity for the Senate race, IN-05 to challenge incumbent Dan Burton, and IN-08 to take advantage of Brad Ellsworth’s departure and challenge presumed Democratic nominee Trent VanHaaften.

Initially, I’d meant to turn this into a run down of all of the primary races, but that’s a lot of work, so I’ll just discuss the Senate for the moment.

Writing for the Indianapolis Star, Mary Beth Schneider summarized the responses of Republican Senate primary candidates on three major topics. Don Bates wants to change social security, particularly for people under 40 (not sure what those changes are, exactly) and cut federal salaries by 5%. Richard Behney, somewhat unhelpfully, says “everything is on the table.” John Hostetler is unwilling to cut military expenditures but everything else is fair game. And, The Once and Future Senator, Dan Coates, perhaps inevitably, goes retro bringing us Republican budgetary hits of yesteryear such as a balanced budget amendment and the line item veto. (My memory is fuzzy here, but I seem to remember the line-item veto being struck down as unconstitutional.) Marlin Stutzman likes those but also threw in the new anti-earmark panacea.

On illegal immigration, as you might expect, they’re all against it. Bates wants to round ’em all up and deport them immediately. Behney added a gratuitously violent metaphor, suggesting that if you try to sneak in through the back door you’re likely to be shot. Coats was a little more bland, being the son of Swedish immigrants, apparently (do we have his birth certificate?) Hostettler suggests that we go after the companies hiring illegal immigrants (a “drain the swamp” approach, I would suggest.) And Stutzman, like the rest, emphasizes “securing the borders.” No word on how any of them will do this with their insistence that government needs to be smaller and we cut spending across the board.

On gays in the military, Bates seems to be out of touch. He says the President should listen to military advisers, that he wouldn’t have implemented “don’t ask, don’t tell” in the first place, but now that it’s in place, it shouldn’t be repealed. In fact, top military commanders have recently said that don’t ask, don’t tell should go. Behney had an answer that was refreshingly honest and suggests that he’s someone folks might want to pay attention to, even if they ultimately disagree with his positions and choose to vote for another.

He said he’d been in the Navy. “I served with gay men and gay women,” he said. “Quite frankly, I’ve known gay men and women that I would trust with my very life. . . . As long as you can do the job, I think you should be allowed to serve.”

Coats, once again, goes retro, embracing the idea that gays should serve secretly in the military, thereby, somehow, alleviating sexual tension in the ranks. Hostettler wants to root out gays in the military and disallow them from serving. Stutzman wants to avoid controversy by ignoring it. (As Bullwinkle’s pal, Rocky, liked to tell us, “that trick never works.”)

Hoosier Advocate cites a poll that the Once and Future candidate, lobbyist and North Carolinian, Dan Coats is currently leading the pack with Hostettler coming in a close second. Stutzman is apparently fairly close. None of them has a commanding lead in this poll, Coats pulling in 29%, Hostettler at 26%, and Stutzman pulling in 18%. Abdul isn’t necessarily convinced of the soundness of the polling, but says that, in any event, it confirms his sense of how the race is going. There is a lot of wiggle room though, with almost 20% undecided.

Not that anyone is going to take political advice from me, but it seems to me that Coats and Hostettler are damaged for the current political environment. Coats is the GOP establishment. He is a lobbyist. And, he hasn’t really been a Hoosier for quite some time. Hostettler is a closer bet because he stuck to his ideological guns (no matter how misguided), but the fact remains he was part of the D.C. clusterfuck in the early 00s. I still figure Stutzman to be the Republicans’ best bet, but maybe that’s because I don’t know a whole lot about him. After that debate, Bates and Behney warrant closer watching than I would have anticipated.

Just an aside since I confined this post to the Senate race, but Thomas Langhorne, writing for the Evansville Courier Press, always provides outstanding coverage of the southwestern Indiana political scene. In this case, he is writing about the debate between candidates for the Republican nomination in IN-08.

Abdul: Rep. Fry at Spring Training

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Abdul is reporting that Rep. Fry (D-Mishawaka) is out of town at Spring Training, the result being that the House Democrats (also missing the sick Dennie Oxley Sr.) can’t get to 51 on the proposed compromises the House Democrats have worked out with the Senate Republicans.

The fact that these compromises can, apparently, get the votes of a majority of the Republicans in the Senate suggests that House Republicans are just being obstinate if a few of them can’t be persuaded to join their Senate brethren in voting on these things.

Should be interesting to get the story on this one and see if Abdul’s sources hold up.

Update The South Bend Tribune reports that it’s the health of Rep. Fry’s father that has him in Florida.

Rep. Craig Fry, D-Mishawaka, is in Florida with his 81-year-old father, who is experiencing serious health problems, Fry said in a phone interview this morning.

“I’m here because he has a health-related issue and it’s been getting worse,” Fry said of his father. “My family and my father’s health are more important than anything.”
. . .
Fry said he and his father went to two games earlier in the week during the House’s five-day break, but he would have been willing to return to Indianapolis on Wednesday or Thursday if Democrats needed him to be the 51st vote.

Lawsuit over school funding

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Three school districts are teaming up to challenge inequities they perceive in the school funding formula. Hamilton Southeastern, Franklin Township Schools, and Middlebury Schools say that it’s unfair to have their per-pupil funding cut while their districts are growing to cushion the blow to other school districts in the state with stagnant or shrinking school populations (but, presumably, fixed costs that remain more or less constant.)

Indiana Attorney General Greg Zoeller (and Indiana Barrister’s Abdul) criticize the use of taxpayer dollars to bring (and defend) the suit.

Indiana Attorney General Greg Zoeller blasted the move, saying in a statement that tax money shouldn’t have to be used either to file the suit or defend the state against the allegations.

“In times of fiscal frugality, it seems wasteful for a school board to spend taxpayers’ money to pay for lawyers to sue the state — requiring me to use taxpayers’ money to go to court, where more taxpayers’ money will be spent to ask a judge to rule on what is essentially a public policy question for the legislature,” Zoeller said.

(First, am I the only one who is a little tired of people ‘blasting’ various things in news articles?)

This notion that units of government shouldn’t be able to use tax money to challenge taxing and fiscal policies that harm them is a little ridiculous. The translation is that they should just shut up and take it. And for Zoeller to double down on the argument complaining of the use of tax dollars to defend the suit is even sillier. Want to avoid spending tax dollars in this fashion? Give them what they want.

The truth is – and I tell my clients this – once you get the lawyers involved, everyone is probably going to lose (except, generally, the lawyers.) There are more efficient methods of dispute resolution. But, if the parties aren’t willing to resolve the dispute – because they think they’re absolutely right or the other side won’t compromise enough or whatever – then there has to be a method of dispute resolution aside from us beating each other over the head with rocks and clubs. Our legal system, for all its warts, is better (usually) than violence.

On the substance, do I think the Hamilton Southeastern lawsuit has merit? From what I’ve seen, not in particular. A constitutionally permissible system of education that is “general and uniform” and “wherein tuition shall be without charge, and equally open to all” probably doesn’t require any kind of per-pupil funding formula. After all, students are not equally expensive to educate.

Of School, Super Bowls, and Mechanized Bureaucracy

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The Indianapolis Public Schools announced that they were going to delay their start time by two hours on the Monday after the Super Bowl, hoping to avoid a repeat of 2007 when bus drivers called in sick en masse after the Super Bowl. This resulted in them having to cancel classes entirely that day. Abdul is reporting that the proposed two hour delay solution is running into static from the State.

[T]he Indiana Department of Education tells Indiana Barrister News that state rules mandate students must be in school the entire time and delays can only be used for emergency situations like the weather.

The State says IPS would have to make up the day later in the school year, or let school out two hours later on Monday. A Department spokesman says IPS could ask for a waiver to allow the 2-hour delay, but it’s unlikely it would get it for the Super Bowl.

To which I say: buncha kill joys. This strikes me as inflexible bureaucracy at its finest. The two hour delay is a reasonable solution to a real, albeit somewhat frivolous, problem. Is education more important than football? Well, yeah. But that two hours of school time isn’t going to make or break the kids, and the Super Bowl isn’t an every day issue.

Once upon a time, local leaders would be able to make these common sense gestures as a matter of civic pride. Now there is a mechanized bureaucracy that abhors flexibility and ad hoc solutions.

IN-04: Steve Buyer to Retire

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RTV 6 is reporting (and I saw it from Abdul first) that Rep. Steve Buyer (R IN-04) will not seek re-election. He cites the health of his wife as the reason for his retirement. I have not had any love for Rep. Buyer’s representation of my district, but regardless, I hope his family’s health situation, whatever it is, improves. In fact, I hope it’s just one of those things politicians say when their real reasons are less sympathetic. Family illness is just one of those devastating things. (I’ll even avoid, for the moment, my inclination to veer off into a discussion of how important access to adequate health care is.)

Rep. Buyer was under fire recently for his non-charity, the Frontier Foundation, which had not been providing scholarship money but been taking in money from corporate donors with business before Congressman Buyer’s committees; usually through a golf outing at nice places. But, unless there are some more spectacular skeletons in the closet, I kind of doubt that added a whole lot to his decision to step down. He is in a very safe Republican district and, with no real primary challengers, has been largely unaccountable for his performance as a Congressman.

I would now expect a lot of Republican interest in the seat. I expect the chances of a Democratic pick up to be very slim but chances of an improvement in the quality of representation for the District as very good.

But, again, even though my differences with Mr. Buyer’s politics couldn’t be more profound, I hope he and his family regain their health and live long and happy lives.

(The Indianapolis Star has the story now as well.

House Passes Two Bills & One Resolution

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The House passed HB 1001 and HB 1002 by votes of 97-2 and 61-38, respectively. HB 1001 had to do with lobbying and ethics, and HB 1002 had to do with preferences for Indiana companies in public works projects.

In case you were curious, the two “no” votes against HB 1001 were Tim Brown (R-Crawfordsville) and Dave Wolkins (R-Winona Lake).

The House also passed HJR 1, which takes the property tax cap law that’s already in place and enshrines it in the Constitution for future generations to enjoy regardless of whether it ends up being good policy or not. The resolution passed by a vote of 75 – 23. If it passes the Senate, which it probably will, then it will be up to The People to vote. Perhaps I underestimate the attentiveness of my fellow Hoosiers, but when it comes time to vote on this, I’d be surprised if 1/2 the people casting votes do so with the understanding that these tax caps are already the law; it will save them exactly nothing in property taxes – at least in the near term; and all they will be doing is make things harder to fix if the Law of Unintended Consequences rears its ugly head. But, I guess if you get to campaign on being Tough on Taxes, it’s all worth it.

Update Abdul has published an excerpt from a letter sent by the Indiana Association of Cities and Towns to legislators. It responds to legislators who claimed that local officials didn’t “make the case” forcefully enough against Constitutionalizing property tax caps. What that seems to mean is that the locals didn’t provide enough political cover for legislators to vote against this block of text making its way into our Constitution.

Hot Streak!

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Remember when Indiana was on an economic hot streak, an “island of prosperity,” if you will? Well, those days are gone with election season, apparently. Now we are getting wave after wave of revenue shortfalls for state government.

Gov. Daniels has called for a plan to reduce K-12 education funding by $300 million without laying off teachers or increasing class sizes.

The governor said the decision was forced by continued shortfalls in state tax collections and a new revenue forecast, delivered just before his announcement Tuesday, that projects Indiana will take in $1.8 billion less in revenue during the next year than expected only six months ago.

Without spending cuts to match it, that lost revenue will eliminate the state’s surplus, projected to be $1 billion at the end of the two-year $27.6 billion budget passed in June.

Obviously, I like to pick on Gov. Daniels’ campaign rhetoric, but Indiana is hardly the only state struggling. And, for those of you who are equally happy to pick on President Obama, the economic collapse started rolling on President Bush’s watch and, I think, in response to his policies. One thing you can be sure of, though, the Club for Growth and Heritage Foundation will use these hard times to call for gut financial regulations, repeal the minimum wage, and cut taxes, especially estate taxes — but that’s because these folks are as constant as the north star *any* financial situation is an excuse to call for these things. Remember how Bush’s tax cuts were the cure for our budget surplus *and* our budget deficit? Remember how “Shimmer” was both a floor wax and a dessert topping? But I digress.

Daniels suggested that schools had gotten a free ride for too long. Other state agencies had been cutting and cutting, and now it’s the schools’ turn since they make up such a large part of the budget.

He suggested schools consider joining the state’s health insurance program, procurement contracts for buying supplies — and foregoing teacher pay increases.

“I’d like the (state) Board of Ed to talk about that,” Daniels said. “The data I’ve seen says that in a year in which the average Hoosier income went down 2.5 percent, the average teacher salary will go up more than 4 percent.”

The Indiana State Teachers Association disputed those numbers, saying that in 2010, pay for most teachers goes up an average of 1.65 percent.

Democrats are skeptical of Daniels’ motives in preserving the rainy day fund in the face of the monsoons that have been here for quite some time. They think he just wants to keep some money in the bank to have a big number to tout when he runs for President. They suggest that it’s raining and perhaps we should go to the rainy day fund before cutting education; then, if education needs to be cut, we cut.

I don’t think Abdul is wrong when he suggests that this is a good time to look for waste and creative solutions in school budgets, but I think we ought to be skeptical if/when the proposed cuts are inevitably damaging to the teachers’ unions. Breaking the teachers’ unions seems to be the dessert topping/floor wax in any proposals concerning education.

The Indy Star article continues:

For 14 straight months, Indiana’s collection of sales, income, corporate and other taxes has fallen short of expectations. In this fiscal year alone, the state has collected $475 million less than it expected.

This highlights the danger in shifting from property taxes to other kinds of taxes. Property taxes are predictable which is important for government planning, given that the controls on government spending and budgeting lead necessarily to a loss of flexibility. As we’re seeing, these other kinds of taxes are much more volatile. Indiana lawmakers need to articulate their plan for dealing with this volatility as they rush to enshrine that mess of a property tax cap amendment in the Indiana Constitution out of political expediency.

Abdul – 5 years on the air

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Because Abdul is so shy, retiring, and reticent about self-promotion, I thought I’d give him a little congratulations on his 5 years on the air at WXNT and link to an Indy Star article about his accomplishment.

Politically, I disagree with him as often as not, but I can’t disagree with this bit of philosophy (from the Indy Star article):

Shabazz is a self-described fiscal conservative and social libertarian. He said he speaks from a “thoughtful conservative” point of view, tending to not be so polarizing.

“I prefer you like me because you like me.”

“It’s OK to disagree as long as we are civil to each other,” he said. “Just have a sense of humor, do your homework, be humane, and people have got no place (else) to go.”