V14 N13 Thursday, Nov. 1, 2007 Peterson taxed in the crosshairs Reaction to property taxes has mayor fighting for political life By BRIAN A. HOWEY INDIANAPOLIS - Mayor Bart Peter- son appears to be in the fight of his political life with the underfunded, Republican Greg Ballard despite the party hierarchy’s lack of interest in the race. An Indianapolis Star/WTHR poll showed Peterson with a 43-39 percent lead. Marion County Democratic Chairman Mike O’Connor called the poll flawed, saying the Star originally told Peterson he had a 2 per- cent lead. O’Connor declined to release the campaign’s internal polling. But in the last 48 hours, the Peterson Indianapolis Mayor Bart Peterson made some bold and controverisl decisions the campaign has unleashed two attack ads at past couple of years on police mergers and crime, but the property tax issue is Ballard. The first used quotes from Monday’s clearly vexing his re-election campaign. (HPR photo by Brian A. Howey) Indianapolis Star editorial that noted that Ballard wasn’t “remotely qualified” to lead Baron Hill/Mike Sodrel congressional race. The ad mentions the nation’s 12th largest city. A new ad that debuted Ballard by name and questions his military background. It Wednesday uses grainy, black and white images of Bal- lard that reminded some observers of the ads in the 2006 See Page 3 The G-man’s plan fans By MORTON J. MARCUS INDIANAPOLIS - This is why I like Mitch Daniels. Speaking about his property tax program he said, “When Indiana acts this time, and act we must, our steps must be fair, far-reaching, and final.” Look “So what lobbyists for various at that alliteration ... “fair, far- reaching, and final”. Who else in special interests say and what their public life gives us sentences like that? Look at his idealism: “fair, members actually think are not far-reaching, and final.” Our state always synonymous.” is known for its persistent lack of fairness, its short-sighted special - Gov. Mitch Daniels, to the Indianapolis interest legislation, and its never- Star ending tinkering. Mitch thinks he Page 2 Thursday, Nov. 1, 2007 can overcome this history. The Howey Political Report is The Howey Political Report The Governor’s property tax PO Box 40265 published by NewsLink Inc. It Indianapolis, IN 46240-0265. program is an efficient political state- was founded in 1994. ment that apportions goodies to www.howeypolitics.com everyone.. Homeowners are given the Brian A. Howey, Publisher [email protected] most favored treatment because they Mark Schoeff Jr., Washington Indianapolis Office: 317-202-0210. constitute a majority of voters. As the Writer Governor puts it: “There’s something Howey’s Mobile: 317-506-0883. Mark Curry, Washington Writer Indianapolis Fax: 317-254-0535. special about homeownership and we Beverly Phillips, associate editor Washington, DC Office: 202-256-5822. want to protect it and promote it,” Jack E. Howey, Editor Business Office: 317-254-0535. For conservative Indiana ©2007, The Howey Political Report. this is a remarkable statement. Is it Subscriptions: All rights reserved. Photocopying, Internet government’s job to jab its big feet $350 annually HPR via e-mail; forwarding, faxing or reproducing in any into our investment decisions? Should $550 annually HPR & HPR Daily Wire. form, in whole or part, is a violation of Indiana favor one form of private Call 317-254-0535. federal law. investment over another? Isn’t that excessive government intrusion into and/or pay more for what they get. If and approve or reject the spending our affairs? they buy less, both the consumer and programs of all government. This is Under the Governor’s plan the retailer, her employees as well as not new. It’s a question of emphasiz- homeowners would see their property his suppliers, will all be unhappy. But ing the word “all” and making sure taxes capped at 1 percent of assessed their unhappiness depends on how that these boards have teeth. But value. The Daniels folks tell us that much they benefit from the lower why is their judgment superior to that today “55 percent of homeowners pay property taxes. of the elected representatives who property taxes in excess of 1 percent How much less do you weigh propose the spending? of their home’s value.” That’s what I when you take change out of your Second, the Governor wants like; these folks consider the facts. right pocket and put it in your left to keep local spending increases Yet, what makes 1 percent of pocket? That’s what is being proposed from exceeding the six-year growth assessed value ‘fair’? Why is it fair for here: cut property taxes and raise rate of personal income in a county, rental residential property to bear a both sales and personal income taxes. unless approved by the voters. This 2 percent cap and commercial/indus- But wait, there is more: presumes that our needs are related trial to suffer a 3 percent cap? If we The Governor’s proposal to our collective income and its past are taxing property, why discriminate (like proposals made by Democrats growth. It runs the danger of gov- by use? Is the lawn of an owner-oc- and Republicans for years) says we ernment spending trailing needs be- cupied property more precious to us must cut local spending. Is our lo- cause the public rarely sees beyond its than the lawn in front of a dentist’s cal public spending too high? Are collective noses. We elect officials to office? our public schools too good for our study needs and examine alternatives To ensure that these inequi- children? Does the level of education with an eye to the future. Referen- ties endure, the Governor seeks a over-qualify them for the future? Are dums often are based transitory, even Constitutional amendment to preserve our police and fire departments too hysterical, swings of public opinion, the details of this proposal. Such well-equipped? Do we over spend not fact. changes would give legitimacy to the on public health? Are our streets too Similarly, the Governor wants long-standing discriminatory violations clean and our sidewalks (if any) in “significant” capital expenditures ap- of the Indiana Constitution passed by decent condition? proved by public referendum. Once previous General Assemblies. How much local spending again representative government Some people who don’t is mandated but not funded by the is demoted and public ignorance is know the meaning of tax incidence state? Yes, it’s always easy to blame elevated. Remember the writings of assert they know businesses can pass the locals, but then Indiana, for the the founding fathers in the Federalist on higher taxes to customers, but that past 40 years, has expressed con- Papers? Perhaps back then there was homeowners are stuck with whatever tempt for local representative gov- more concern about good government higher taxes they pay. Believe me, ernment. Mitch’s proposals are fully and less fuss about property taxes. v no reputable economist will assert within this tradition. anything but ignorance about who First, the Tax Board in each Mr. Marcus is an economist, bears the ultimate burden of a tax. If county, not directly elected by the writer, and speaker formerly with sales taxes rise to cover lower prop- people, is to sit as a super-govern- the Kelley School of Business at erty taxes, consumers will buy less mental entity, empowered to review Indiana University. Page 3 Thursday, Nov. 1, 2007 conjured images of an embattled Sue Anne Gilroy in her honest and accountable. I don’t care about the politics. I 1999 campaign against Peterson who used similar negative care about our city and I know you do, too. So join me in tactics. In that race, Peterson was the unknown and the putting Indianapolis back on its path to greatness.” Gilroy campaign went very negative in the final week about This dramatic finish to one of the strangest his lack of experience and the bad things he would do as races in memory (although nothing will top the Matt Kelty mayor because they were behind. It only made Peterson’s fiasco in Fort Wayne) reminds us of another upset: Greg winning margin larger. Walker over Senate President Pro Tem Robert Garton in As one observer told HPR this morning, “They have May 2006. The parallel there was Garton’s 10-fold money gone from these sunny advantage over Walker, feel good ads to hard who exploited social negative and that looks divisions within the GOP pretty panicky. They and a lethal issue (leg- have spent millions islative health care for on ads and apparently life) to score a dramatic nothing they have done upset. has worked so this Peterson has might not either. People more than 10 times the don’t want to vote for money of Republican Bart. Right now the Ballard in a city that Democrats are trying is significantly trend- to depress the Ballard ing Democratic against vote.” an opponent that has Ballard respond- been all but ignored ed by saying, “In my by the GOP hierarchy. 23-year military career, I But Peterson faces the held numerous positions same kind of emotional that called upon the issue (property and same kind of skills one income tax increases) would utilize as mayor. I that Garton did. While am sure that I am more there is no split in the prepared now than Mr. Democratic Party, the Peterson was when he This is one of two Greg Ballard TV ads began airing on Wednesday. Mayor fact is that speculation first ran for mayor eight Peterson has been running ads since May.