I attended my first “Third House” meeting in Tippecanoe County today. I’ve been eyeing the program for years but for whatever reason, never signed up. (Might have something to do with the 7:30 a.m. Saturday morning meeting time.) Seems like it’s right in my wheelhouse. It’s an event conducted every couple of weeks on Saturday mornings during the legislative session by Greater Lafayette Commerce where local legislators attend along with an interesting cross section of the community to discuss legislative matters. I knew a number of the people there personally and a number of others by reputation.
The main part of the initial meeting this morning was a presentation by Everybody’s favorite economist ™, Larry DeBoer. Not a great surprise, but it looks like school funding is going to be the main or at least one of the main issues this session. K-12 funding makes up about half of the state budget. The school funding formula has a base per pupil component and then schools get additional funding using (I think) the number of kids getting subsidized textbooks as a proxy for determining which schools have kids who need extra help. In Tippecanoe County, West Lafayette Schools are near the bottom of per-pupil funding and Lafayette Schools are near the top. Tippecanoe School Corp. is in the middle. So, the joke went, if our Third House can figure out a formula that makes all the Tippecanoe schools happy, we’ll probably have the state budget mostly solved.
Another issue he mentioned had to do with taxes on agricultural land. Those taxes have been rising pretty sharply, mostly in response to the fact that agricultural land values have been going up, and agricultural commodities are doing pretty well. That’s fine so far as it goes. Your income and wealth increase, you pay more in taxes. However, the agricultural valuations are made in arrears. That’s generally good news when prices are trending upward. Your income and assets are going up while your taxes are based on previous years when things weren’t so good. That’s generally bad news when prices are trending downward because you have less money to pay taxes with, but your taxes are assessed based on the better years.
Anyway, I’ll be interested in seeing how the process works as the session progresses. I’ve been assigned to the courts and criminal code committee. So, I guess my role at Third House will be more focused on bills affecting the judiciary and helping to make recommendations on those issues. More specifically, I’m probably going to be focused on civil legal matters because the committee is stacked with people way more experienced in criminal law than me. Should be interesting.
Re: Taxes on Ag land going up in good times and down in poor times but with a lag. This is true of residential land as well. If everyone is making money then housing prices and thus total tax will tend to rise. Then the Great Recession hits, your housing value tumbles, you get fired from your high paying job and eke by on a lesser job yet you owe tax on the value of your house during the good times of previous years.
In other words I don’t see this as an Ag problem only but rather a problem with how property taxes are determined for everyone.
I see it as a cash management problem.