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Tax Crisis Faces Indiana's Power Trio

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Tax Crisis Faces Indiana's Power Trio V13 N43 Thursday, July 12, 2007 Tax crisis faces Indiana’s power trio Legacy and political challenges for Daniels, Bauer & Peterson By BRIAN A. HOWEY in Indianapolis For the growing ranks of disgruntled property tax- payers facing double and triple digit increases, the candi- dates for blame and salvation include Gov. Mitch Daniels, House Speaker B. Patrick Bauer, and Indianapolis Mayor Bart Peterson. Bauer’s misguided rebate has become a magnet for criticism and acknowledged as a “Band-Aid” by allies like State Rep. Chet Dobis. Bauer’s own tax storm hasn’t even hit St. Joseph County, where GOP and Democratic sources Gov. Mitch Daniels, are describing a “horror show” in the making. If he fails, House Speaker B. House Democrats, already staggered by early retirements Patrick Bauer and and others in the making, could easily lose their slim major- Indianapolis Mayor Bart ity. Peterson have a lot Gov. Mitch Daniels sat out the property tax debate riding on the line in the during the 2007 legislative session when previous governors 2007 property tax storm. - such as Doc Bowen in 1973 - were the catalysts. He signed (HPR & WTHR Photos) the rebates into law. The tax crisis landed in his front yard like a Fourth of July cherry bomb. An elusive solution could put his re-election prospects - already vulnerable to the Iraq War disaster - in a precarious position. As for Peterson, we keep thinking of a quote State Rep. Winfield Moses Jr. - a former two-term Fort Wayne Our taxing problem By CURT KOVENER CROTHERSVILLE - In a couple of weeks when you re- ceive an envelope with a return address of the Jackson County Treasurer, before you swallow hard, knowing that your increased property tax bill is inside, take a prophylactic aspirin, heartburn tablet, “I don’t trust the government to and/or belt of bourbon before opening. shovel my sidewalk and I don’t Try to understand that your property tax bill is developed like a three-legged stool. trust the government to spread The assessed value for your property con- tributed to it, spending by local government the word of God.” (school, county, town, township, library) contributed, and funding rules and subsidies - State Rep. Jon Elrod, reacting to by the legislature added to the mix. Let’s try to condense all of criticism he attended Gay Pride event those as they probably apply to your looming tax bill. Several years ago the state (at the bidding of the legislature) moved Page 2 Thursday, July 12, 2007 assessing to represent more market The Howey Political Report is The Howey Political Report based values. Today, a property’s value published by NewsLink Inc. It PO Box 40265 should more closely resemble what it Indianapolis, IN 46240-0265. was founded in 1994. would sell for. (Except for agricultural www.howeypolitics.com ground. Curiously, Purdue says farm [email protected] ground sold on average for around Brian A. Howey, Publisher $2,700 an acre, but a farmer sells to Mark Schoeff Jr., Washington Indianapolis Office: 317-506-0883. a developer for $5,000 to $30,000 an Writer Indianapolis Fax: 317-254-0535. acre, however for taxation the state as- Mark Curry, Washington Writer Washington, DC Office: 202-256-5822. Beverly Phillips, associate editor signs a value of $850 an acre.) Business Office: 317-254-0535. Jack E. Howey, Editor For the first time this year, we will experience trending, a process ©2007, The Howey Political Report. Subscriptions: which will reassess our property each All rights reserved. Photocopying, Internet $350 annually HPR via e-mail; year based upon what property in our forwarding, faxing or reproducing in any $550 annually HPR & HPR Daily Wire. form, in whole or part, is a violation of neighborhood is bringing. Call 317-254-0535. federal law. After looking at your assessed value, before you claim your place isn’t Or what about those new fire es. As those subsidies decrease, to keep worth that much, first do some home- trucks? Almost a quarter of a million government services going, our tax bills work. I am routinely amazed at what dollars for just one truck? It replaced go up. some property is bringing. Within the a 1967 model. And remember, as a So now we are experienc- past three years for instance, a 40-acre result of the purchase of that new fire ing the confluence of what some call a parcel on Bethany Road at the edge truck and the town’s improvement to perfect storm: decreased state support, of town sold for $151,000, a five acre the water supply system (more spend- increased “trended” assessed values, parcel in town sold for $65,000, and an ing), the community’s fire rating went a shift in the tax load from business to eight acre parcel in Uniontown sold for down which resulted in lower insurance residential property, and local govern- $300,000. I will let you and your calcu- premiums. The local fire department ment spending being faulted for the lators do the math for your neighbors. has the shortest response time of any increase. If you still think your home val- volunteer fire department in the county. Our legislators point out that ue is unreasonable, getting a real estate Now in my estima- we will get a tax rebate check (along appraiser to provide you a market value tion, the third leg of our tax stool, the with a legislative mandated letter sing- will greatly help both you and your as- legislature, plays a greater roll in taxa- ing the praises of our elected state law sessor make the needed adjustments. tion than we or they would acknowl- makers for giving us back our money) Now let’s look at government edge. I was shown a letter from one later this year. Well, maybe. spending. Sure, it’s easy to say they state senator claiming that local govern- It seems that only those with spend too much. Maybe you think we ment was wrongly pointing the finger homestead exemptions are eligible for didn’t need that big new jail because it at the legislature for the tax increases. the rebate check. If you failed to file for was too expensive to build and run. But He pointed out on our tax bills that the a homestead exemption, you can start being all for law & order, you appreci- state gets only a few cents. “How can crying now. And if you are delinquent ate police doing their job to keep bad the legislature be held responsible for in some other property taxes (home, guys and gals off the street and to do the increases in your bill?” he asked. farm, business) your rebate check will so police need someplace to warehouse “Because they make all the be withheld to pay that delinquency. offenders…we call that warehouse a jail. rules,” we should answer. It was the And because of the lateness of the tax A jail which is now filling up because legislature that moved us to market bills going out the tax rebate will be late the police are doing their job but can’t value assessing, the legislature that ap- as well. And it is the county that will empty as fast as its filling because there proved “trending” our assessed values, foot the bill for generating and mailing aren’t enough courts to process the mis- the legislature that gave businesses tax those rebate checks at a cost estimated deed doers. So a new court is coming breaks and eliminated the inventory around $7,000. There’s that increased and - that’s right - more spending. tax which shifted the payment burden spending again. Or maybe you didn’t think to residential property owners. And in Tax bills may be coming out in the school needed renovated. Before 2006 the legislature approved reducing a couple of weeks, but go ahead with you say we didn’t need to air condi- the Property Tax Replacement Credit your aspirin or shot of bourbon now. tion classrooms, turn yours off. The old and Homestead Credit which went into Consider it like Novocain before the school kitchen and its equipment was effect for the first time this year. Those dentist’s drill. the same that served me lunches back v are subsidies paid by state income, Kovener publishes The Crothers- in the 1960s. Have you replaced any sales and excise taxes to local govern- ville Times and is a township asses- kitchen appliances or done any remod- ment to offset the costs of local servic- sor. eling at your home in the past 40 years? Page 3 Thursday, July 12, 2007 Taxed Trio: From page 1 Bosma and House Republicans pushed a defer- ral of residential tax increases, extending the Homestead mayor - once told us: “Why did I run for that third term?” Credit filing deadline, an immediate reassessment in coun- If Peterson can’t deliver property tax relief and confront ties where there are “apparent gross discrepancies,” and a growing crime problem, complicated by a $90 million resurrecting the GOP local government reform plan that request to prop up the long-neglected criminal justice would include referenda approval for all major construction system, his third term might not be as inevitable as once projects. Long term, Bosma called for a nonpartisan panel thought, and if he gets it, could destroy any hopes he of fiscal experts to study the entire tax system with a goal maintains for a run for governor or U.S. Senate. of ending residential property taxes. He also advocates state Even though many knew this tax disaster was government funding all child services costs.
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