Brian Howey: Municipal elections and the property tax issue

By Brian Howey

INDIANAPOLIS, IN – After a summer where angry taxpayers gathered for tea parties from Noble County's Sylvan Lake, to downtown Muncie, to Indianapolis' Monument Circle and Broad Ripple Canal, it comes as a mild surprise that the property tax issue hasn’t become the driving force in the now concluding municipal elections.

In some cities – like Elkhart, Fort Wayne, Kokomo, Muncie, Jeffersonville and New Albany – there isn’t an incumbent on the November ballot. The most conspicuous target for taxpayers carrying pitchforks has been Indianapolis Mayor Bart Peterson, who finds himself in the fight for his political life against a novice Republican – Greg Ballard – who hasn’t been able to attract any financial or even notable verbal support from GOP heavyweights like state Chairman Murray Clark and Gov. Mitch Daniels.

Conventional wisdom dictates that taxpayers are so mad that they are prepared to lash out against the first targets – in this case mayors and city council members – who are on the ballot on Nov. 6. Or as the legendary Eric “Otter” Stratton once said in the movie “Animal House,” what is absolutely required is “a really futile and stupid gesture be done on somebody’s part.”

But veteran political writer David Mann, who has been monitoring the New Albany and Jeffersonville mayoral races for the News And Tribune, explains, “There has been some anger about (property taxes) in Floyd County, but most of that has been geared toward the assessor’s office, (Gov. Daniels) and the Statehouse.”

This is underscored by a statewide Research 2000 poll in September that sought answers to who is responsible for the property tax crisis. It found that 22 percent blamed the Indiana General Assembly, 19 percent Gov. Daniels, 13 percent the Department of Local Government Finance, 12 percent county assessors, 11 percent township assessors, 12 percent “all of them equally,” and 9 percent Mayor Peterson.

At the Howey Political Report's annual Forum on Oct. 23, Indiana Democratic gubernatorial candidate Jim Schellinger noted, “The fact is, Indiana has suffered its largest property tax increase under this governor’s watch. Your No. 1 responsibility is to steer us from the danger zone and this governor didn’t do that.” His May 2008 primary opponent, former congresswoman Jill Long Thompson called it a “complete breakdown in leadership.”

Just hours after they spoke, Gov. Daniels issued his “cut and cap” property tax plan, which called for 1 percent property tax caps for homeowners, 2 percent for renters and 3 percent for businesses. “Any plan that makes a real difference in property taxation will have to go to its root cause, and that is excessive spending,” Daniels said. “Total local spending on school construction, libraries, fire departments, and all other local services simply cannot keep rising faster than Hoosier incomes.”

Note that he didn’t mention cities or counties, where my experience as a government reporter in Elkhart, Fort Wayne and Indianapolis found virtually all mayors, councilmen and commissioners dedicated to keeping tax rates stable. Municipal voters in 2007 appear to understand this, and, thus many of the current mayoral races are being waged on economic development, police and fire department staffing and other local issues.

Which calls into question some of the key tenets of the Daniels' plan. Why constitutionally cap local spending (but not state spending?) when at least three entities – cities, towns and counties – have historically proven to be disciplined?

As for the school construction, one of the first acts of Gov. Daniels in 2005 was a moratorium on new projects. The result was voluntary cuts to the tune of almost $200 million statewide in the first year. That bully pulpit worked. In many quarters during this property tax crisis, schools have been blamed for most of the pain. And while there are plenty of basketball palaces, AstroTurf football fields and $14 million swimming pools, there’s another factor coming into play with public education: No Child Left Behind, a largely unfunded federal mandate brought about by Daniels' former boss – President Bush.

I recall a speech by former U.S. Sen. Dan Coats to the Indiana Senate back in the mid-1990s when he addressed the coming “new federalism” and the resulting shift of costs from the feds to state to local governments.

The Daniels “cut and cap” plan calls for public referendums on any major municipal or school construction project, and a County Tax Board that would approve the spending of all local governments. The tax board would essentially be an unelected super structure over elected officials. Already written into law, this step comes without addressing the real root cause of local spending, which is too many layers of government that will, apparently, be in the crosshairs of the Kernan-Shepard Commission on Local Government Reform in the coming weeks.

Local referendums could work progressively in some cities and counties, and hysterically in others, while breeding a new California-style industry that will bring the kind of emotional politics we see in Congressional campaigns to scores of local communities.

As the 2007 municipal elections seem to be indicating, Hoosiers might quibble with individual mayors or councilors, but these are hardly the big tax and spenders that leaders at the Statehouse have a penchant for assessing the blame that routinely should fall at their own feet.

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

Technorati Tags: State Brian Howey Government Howey Political Report Indiana Politics Indianapolis Marion County Opinion Politics