Brian Howey: Daniels, Bauer, Peterson have a lot at stake in tax crisis

Bauer’s misguided rebate has become a magnet for criticism and has been 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 are describing a “horror show” in the making. If he fails, House Democrats, already staggered by early retirements and others in the making, could easily lose their slim majority.

Gov. Mitch Daniels sat out the property tax debate during the 2007 legislative session when previous governors were the catalysts. He signed 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 mayor - once told us: “Why did I run for that third term?” If Peterson can’t deliver property tax relief and confront a growing crime problem, complicated by a $90 million request to prop up the long-neglected criminal justice system, his third term might not be as inevitable as once thought, and if he gets it, could destroy any hopes he maintains for a run for governor or U.S. Senate.

Even though many knew this tax disaster was coming, all are now on their heels, reacting and scrambling for more information as storm clouds gather.

And yet, despite the angst and confusion, a successful conclusion could cement their ultimate legacies as their time in office ticks away.

Daniels was quick to emphasize the broader picture. “That is, we have too much government,” Daniels said. “Too many layers, too many subdivisions, too many offices, too much overhead of all kinds. If up until now the idea of fundamental restructuring of local and school government in Indiana seemed an abstraction, maybe it will now be more clear that it has a direct impact on peoples’ taxes.”

Steve Johnson, president of the Indiana Fiscal Policy Institute, said he has been pleading for local government reform since 2005. “We’re sitting on jurisdictions that were created in the 1800s,” Johnson said. “Nobody knows who’s done a good job or bad job. You go for townships, cities, counties and then special taxing units on top of that; often the different local officials don’t have a way to gather sufficient local accountability. The authority and accountability is spread across so many taxing units, it’s difficult for people to understand the local controls.”

Johnson said it used to be people would do the “five things define your life - work, home, leisure, where you get information, where you shop - all in one county.” Now it’s common to find a good percentage people who do two or three of those things in other counties. “The taxing structures don’t fit,” he said.

In the interim, Daniels said he is floating ideas for short-term measures to reduce the pain that could prompt his calling for a special session as the crisis spreads to cities like Muncie. “I have formulated an idea that would require legislation, and I’m trying it on legislative leaders now. It’s just too soon to tell whether this is a workable idea or a sellable idea or the best idea,” Daniels said.

Daniels said Wednesday he will extend the deadline for counties to decide to use other available revenue tools to help them reduce local property taxes from Aug. 1 to Oct. 1. When the Tippecanoe County Council rejected the income tax last month, members said it “came at them too fast.”

There will be further analysis of counties where assessments appear to have been “botched,” to use words from Daniels and Bauer.

Bauer was originally angry that Peterson had called for a special session. The Speaker, who could be facing his own district tax crisis, said Wednesday evening, “If there is to be a special session on the issue of property tax relief, there must be a defined bipartisan proposal that offers long- and short-term solutions. Until we see a plan from the Governor that has agreement from all interested parties, there is no need to discuss a special session.”

Peterson will be the first of Indiana’s power trio to appear on the ballot ... this November. He faces a mostly unknown, completely under-funded Republican named Greg Ballard. But if Peterson doesn’t get in front of this crisis, he could be known as the mayor who defeated himself.

“As property tax bills are starting to hit home, politicians are going to be tempted to point fingers,” Mayor Peterson said. “The blame game is unproductive and a waste of time. The people I’ve talked to in neighborhoods across Marion County just want solutions, and they need help now.”

Yes, solutions. Bipartisanship. A long-term view. Now all they need is the white hot heat of public opinion … from you.