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Abdul at Indiana Barrister has a post up about the Jon Elrod flap entitled “So these are the new rules.” Elrod is a Republican state Representative who is currently running for Congress. At some point while he was at his seat on the floor of the House of Representatives during session, he was working on documents for his campaign and handing campaign literature to a House staffer. Democratic operatives caught wind of this, took a camera to the House balcony, and taped Mr. Elrod working on campaign matters on the floor of the House.

Abdul wrote:

But there is a bigger issue here. I was at the Statehouse today and from what I was able to gather, not a lot of people on either side of the aisle were too happy about how this all went down. As one lawmaker put it, “this changes the rules and we are going into new territory and opened a can of worms.”

What they meant was that anyone with a video camera can go into the House gallery and record what lawmakers are doing while sitting at their desks. This means they can get video of lawmakers playing solitaire, booking airline reservations, shopping on eBay and even visiting their campaign websites all with government computers on government time.

This put me in mind of a post I wrote back in July of 2005 of which I am inordinately proud entitled Internet Panopticon. Back in the day, Jeremy Bentham proposed a design for a prison with a tower in the middle of a donut shaped building. The prisoners would be in the donut in back lit cells. Guards would be in the tower. The point of this was that the prisoners would know that they were visible at all times. Furthermore, at any given time, they couldn’t tell when they were being watched. The idea is that the prisoners would self-regulate for fear that they were being watched.

Foucault’s description of the principle:

Hence the major effect of the Panopticon: to induce in the inmate a state of conscious and permanent visibility that assures the automatic functioning of power. So to arrange things that the surveillance is permanent in its effects, even if it is discontinuous in its action; that the perfection of power should tend to render its actual exercise unnecessary; that this architectural apparatus should be a machine for creating and sustaining a power relation independent of the person who exercises it; in short, that the inmates should be caught up in a power situation of which they are themselves the bearers.

Technology is potentially bringing this principle to bear in lots of areas of modern life. If the Elrod business really is changing the rules of the game as Abdul suggests, then perhaps the Panopticon is coming to the State House. I’m actually not that excited about the idea of putting our legislators in a fish bowl, viewable by the public at any given time. However, I would support that arrangement before I would support having the general citizenry in a fish bowl viewable by government authorities. Hopefully our legislators will be mindful of the Elrod matter when legislation comes across their desks that has the effect of putting citizens under unwarranted surveillance.

Abdul has a post up on the subject of tax caps imposed on local government wherein he minimizes the concerns of local officials.

Most of them will complain that the caps will hurt their budgets and they will have to cut police and fire. As much as I respect local officials, I truly wonder if any of these guys get it sometimes. The purpose of the hard caps is to protect the taxpayers from huge shifts in their tax bills.

And the money the local officials spend is the taxpayers’ money. It is not their money! When property taxpayers were up in arms and many seniors were afraid of losing their homes over high tax bills, where were these officials? What were they doing to stem the tide of fear and dissent? A lot of them were nowhere to be found. But now they are crawling out of the woodwork (especially the schools) to keep their hands on the taxpayers’ hard-earned money.

One issue I have is that nothing protects local government budgets from huge shifts in funding and duties. This property tax spike came crashing down on us when State officials shifted tax burdens onto local property tax rolls. They eliminated the inventory tax and shifted those burdens to property taxes. The State Supreme Court struck down the previous assessment system, shifting burdens from businesses to residential tax payers. The State General Assembly balanced its budget at the expense of homestead and property tax relief credits. Now the Governor, at every available opportunity, falsely blames the property tax spike on increased local spending. The primary tool made available to local governments to ameliorate these state-caused property tax increases were to allow local government to raise local income taxes. You saw how well that kind of tax increase worked for Mayor Peterson.

So local officials have every right to complain. They have no reason to trust the State to do right by them. The State has deprived them of resources and increased their burdens. To add insult to injury, State officials have pushed tough political decisions to local officials. Raising an income tax makes voting on the proper time zone look as innocuous as passing a resolution honoring the local girl scouts.

The taxpayers are not, by and large, fully aware of this dynamic. All they know is that their tax bill went up, and they aren’t getting anything more for their tax dollars. So, I disagree with the notion that taxpayers are making a fully informed decision to do with less fire and police protection in exchange for lower taxes. I don’t get the sense that the analysis goes that far. There’s a vague notion, fueled by the Governor, that these local governments are wasting money and that if we only cut this unspecified waste, tax bills would go down. I don’t get the feeling taxpayers, by and large, envision doing without any of the services they want and need. And who is going to take the political hit when crime rises, fire protection is slow, trash builds up, the schools get run down, the courts back up, or whatever? It’s not going to be the Governor.

So, how much of the furor over increased property taxes I’ve seen in the Indiana blogosphere has to do with Marion County’s failure to plan ahead?

For the furor, see:
here
here
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However, as Advance Indiana notes, among other things, Marion County apparently failed to pass a County Option Income Tax to offset the elimination of the inventory tax. That’s a pretty big deal, meaning that all of the revenue that used to come from inventory tax payers has now devolved onto other property tax payers in Marion County (and similarly situated counties). It makes me wonder how much of the pain in Marion County could have been avoided with some advance planning. It also makes me wonder how bad things are outside of Marion County. Unless this is a problem counties around Indiana generally have found themselves incapable of dealing with, I’d suggest that Indianapolis Mayor Peterson’s requests for a special session of the General Assembly be declined. That property taxes were going to increase substantially was no mystery during the regular session. The General Assembly took action, albeit well less than perfect action. Now, I figure they’re obligated to let the dust settle and revisit the issue next January.

Abdul says: “You know it would be nice if someone would put out a news release saying “we’re going to spend less money so Hoosiers can pay less in taxes!” That would be news.”

That’s easy to say. But, I’d like to first know how much spending has actually increased relative to inflation. My sense is that it’s not much of an increase. I’d also like to know which government services should no longer be provided.

The primary reasons for the high increases in property taxes recently are: 1) Elimination of the inventory tax – former inventory tax payers are paying less, so other property tax payers, including residential homeowners have to pay more. Counties were given the ability to implement a County Option Income Tax to offset the inventory tax reduction; basically you replace the revenue with income taxes instead of property taxes; 2) Reduction of the homestead credit and property tax relief credit – state subsidies that took the burden off of property taxes. These credits were provided out of a recognition that the state imposed large burdens on local taxes and also imposed significant restrictions on local taxing powers. These subsidies were reduced in an effort to balance the state budget and, effectively shifted the problem to local government and property tax payers; and 3) Changes in assessment rules – years ago, taxpayers brought a lawsuit arguing that the assessment rules unfairly and artificially underassessed some properties and overassessed others. The Supreme Court agreed and required something resembling market values be used for assessments. As a result the relative tax burdens shifted, with the underassessed property owners having to pay more and the overassessed paying less.

So, generally speaking, the dramatic rise we see in property taxes is less a matter of local government spending gone amok, and more a matter of shifting tax burdens. (You can expect those whose tax burdens went down to keep relatively quiet). Also, in some cases – such as, apparently, Marion County, this already difficult situation was made worse by failure to use available tools, such as the County Option Income Tax.

Bats Left Throws Right has a much more entertaining explanation of much the same thing.

[tags]taxation[/tags]

The Indiana Barrister has a State House update. Abdul says that

[House] Republicans are demanding an addition $50 million in property tax relief, $5 million in education tax credits and the removal of language that would mandate no more than 55 percent of the 14-member Ivy Tech State Community College Board be of the same political party.

Bosma says the tax relief can be paid for by reducing spending increases in certain programs such as the Indiana Public Defender Commission and Tobacco Use and Prevention program.

Abdul then goes on to note Bosma’s indication that there are no House Republican votes for the budget in its current form and that Democrats control the House by a 51 to 49 margin. Party line budget votes seem to be the rule rather than the exception in the House. But, the fact is, this can’t be strictly an ideological party division on the budget — after all, the Senate Republicans will have to approve this thing too. With the margins so thin and with his past voting record this session, I’m afraid the hard line by the House Republicans might put dollar signs in Rep. Craig Fry’s eyes.