Talking property taxes

By Mike Alexander

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State legislators representing the Greenwood-area would like to see the elimination of property taxes. About 50 voters heard Sens. Brent Waltz and Pat Miller, and Reps. Woody Burton and David Frizzell say property taxes tend to go out of control. That’s why an amendment to the state Constitution is necessary. [ad#single-post] In a public meeting in Greenwood Saturday, legislators answered questions about capping property taxes, and also cutting the state budget and moving township services to the county level. Recently, both the House and Senate in the state Legislature passed a joint resolution that would constitutionally cap property tax rates at 1 percent for homeowners, 2 percent for agricultural and rental properties, and 3 percent for businesses. That resolution will become a referendum for Indiana voters to decide in the November election whether an amendment should be made to the Constitution to establish those caps. The resolution was proposed after the taxpayers revolt in 2007. Both houses of the state legislature had to pass the resolution in sessions last year and this year to move it to a referendum vote. Would constitutionally putting in place property tax caps bankrupt local governments? In the audience, former Johnson County Councilman Ron West said it would. He said local governments are bound by fixed costs. For example, 70 percent of the Johnson County budget pays for criminal justice, and other things such as utilities and fuel. “It would be a terrible mistake to put on caps,” he said. As for property taxes, a more fair approach, he added, would be to tax property on a square footage basis. Local communities should have a choice of what they want to pay for, including the level of education, and police and fire protection. Burton answered that if it should reach a point where local services would be affected, then the state legislature will do something about it. In answer to a voter who had farm land in Johnson and Morgan counties and believed the 2 percent cap was unfair, Rep. Burton said farm land is taxed on yield (what it produces) value rather than market value. Sen Waltz said in 1816 Indiana was inhabited by about 90 percent farmers, with the remainder living in cities and towns. Since World War II, the reverse has become true. But farm lands still are basically being taxed the same way. Sen. Miller said she favored limiting rising assessments if tax rates are held down by caps. She liked what California does, keeping property tax rates the same from the date of purchase to date of sale. Miller said state revenues are funded by property taxes; local governments are funded by income taxes and sales tax. “If we would reduce the sales tax by 5.5 cents and put a tax on services, we could eliminate property taxes,” she said. Burton said the state has already cut 20 percent from its budget. “That’s not all bad, as far as I am concerned. If there are deficiencies in local government, then we, as legislators, will have to come up with a solution.” He added that state spending, despite drastic cuts, currently is running $3 million more a day above revenues. Miller said the state already has started spending the $1 billion it had in reserve. She said in 18 months, the state will be $1.6 billion in the red because of reduced state revenues brought on by the economic recession. She said the state must find a way to regain the $1.6 billion loss if it is to fund schools and higher level education at same level it is today. “State employees have not had a raise in three years,” she pointed out. As for township government, Sen Waltz said it is his contention that it is not cost efficient. As for residents in Greenwood and White River Township voting May 4 to decided whether to merge, thus eliminating its township government, Waltz said township residents would face a tax increase if there is a merger. He said township residents must consider if they will receive sufficient, additional services to merit the tax increase. If not, they should vote it down. Waltz said mergers can be complicated when there is the possibility of better services and lower salaries on one side, and higher salaries and lesser services on the other side. Sen. Pat Miller said there is sentiment in the state Legislature this session to eliminate township advisory boards. Sen. Frizzell said he would be in favor of consolidating township government into the county if the majority of people want it and the same level of services would be maintained.

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