Brian Howey: Time to ponder the coming debate on taxes and reform

INDIANAPOLIS, IN - I’m always skeptical when a complex plan like the one Gov. Mitch Daniels announced last Tuesday comes out and everyone rushes to say they are either for or against it.

While I certainly agree with a number of things Gov. Daniels is trying to do with his property tax “cut and cap” plan, I’m going to do what I did when Major Moves came down the pike. I want to listen, hear various opinions, cue in on the debate, and then come to a well-informed conclusion.

In the hours after Gov. Daniels announced plans to raise sales taxes by 1 percent, cap taxes by 1 percent, allow taxpayers to vote on major capital projects, consolidate tax assessing at the county level, and move welfare and school general fund costs to the state, I heard a mature response from leaders like House Speaker B. Patrick Bauer and some of his Democratic colleagues.

“Indiana House Democrats already are on record supporting the concept of having the state assume child welfare costs,” he said. “We would continue to favor that proposal. The idea of a circuit breaker to protect home owners from huge increases in property tax bills started with former Gov. Joe Kernan, and it already is a part of state law. The public has the right to ask for a full accounting any time there is an effort to enact a general tax increase in the state of Indiana.”

Bauer brought up perhaps the most intriguing part of the shift of services from local property taxes to the state. “There is some concern that shifting education funding completely to the state will lead to a loss of local decision-making over policies affecting our schoolchildren,” Bauer said. The state currently covers 85 percent of those costs. “It will be left to the governor to build a consensus to enact these proposals.”

State Rep. Dennis Avery, D-Evansville, told the Evansville Courier & Press, “The facts are that the person who pays the bill ends up calling the shots.”
Democratic gubernatorial candidate Jim Schellinger said he had “three guiding principles” on the issue, declining to give specifics because, he said, he needed to study the plan. He said a plan must be “consensual, fair and present a long-term solution.” He said it should consider “in large part one’s ability to pay” and that it should have “a solid revenue stream.”

Most school superintendents are still studying the plan and haven’t come to conclusions. But this is a philosophical question. Many local leaders have been asking for home rule, local control and an end to state mandates on local government. This portion of the plan cuts against that grain.
Daniels said on WTHR-TV Wednesday night, “I think it will strengthen local control. There is nothing more local than a referendum. I would be happy if we got rid of the difficult and clumsy remonstrance process and replace it with a straight vote. If a project like a school or a library is needed, you certainly ought to be able to make that case and let the people decide.”

The governor also took on a concern by Democratic gubernatorial candidate Jill Long Thompson, who called the sales tax increase “regressive” and a potential burden on the poor and senior citizens.

“Every such property owner would get major relief,” Daniels said. “It’s got to be funded somehow. Of all the possibilities - and I looked at them all - this is the fairest one.  Sales taxes are taxes we choose to pay. You can argue that wealthy people pay larger amount of such dollars.”

The governor said he listened hard to those who wanted to repeal property taxes all together. “Much as I would like to have taken that route, the risks to our schools, to small business, and to our economy generally, dissuaded me,” Daniels said Tuesday. “In particular, I could not support the large increase in personal income taxes, paid by every Hoosier worker and most small businesses, which would be necessary for total elimination.”

So it was interesting to hear proponents of that – like State Rep. Jackie Walorski, R-Lakeville - who said, “This bold plan gives the legislature a starting point to begin the process of bringing much needed property tax relief in 2008.”  Doug Eckerty of Citizens of Delaware County for Property Tax Repeal told the Muncie Star Press that he supports the plan, saying, “I think its a step in the right direction.”

State Rep. Winfield Moses Jr., D-Fort Wayne, called the plan ambitious and said that it needed “deep analysis.” State Rep. Chet Dobis, D-Merrillville, called it a “starting point” and told the Times of Northwest Indiana, “Not everyone, including Democrats and some Republicans, is going to agree with every portion, but that’s what the legislative process is about. It’s a compromise.”

The other shoe to drop is the Kernan-Shepard Blue Ribbon Commission report on government reform that will come in the next two months. We will need that to get the kind of complete picture needed to truly move Indiana government into the 21st Century.

Howey is publisher of The Howey Political Report at www.howeypolitics.com

Technorati Tags: State B. Patrick Bauer Brian Howey Brian Howey Chet Dobis Dennis Avery Doug Eckerty Government Howey Political Report Indiana Property Tax Repeal Indiana Property Taxes Indiana Taxes Jackie Walorski Jill Long Thompson Jim Schellinger Joe Kernan Mitch Daniels Opinion Politics Winfield Moses

• ‹ previous
• 2958 of 3747
• next ›