Tuesday, October 23, 2007

Mitch's property tax plan announcement

Mitch's property tax plan announcement

October 23, 2007

Good evening.

For the last few months, no subject has been on my mind, or the mind of most Hoosiers, as much as property taxes. In almost every county, some homeowners were hit with huge increases; in some counties, it seemed almost everyone got a big jump. Assessments were inconsistent and often grossly unfair. It is not acceptable that any citizen cannot afford to keep the home they may have worked all their lives to buy. The status quo is not tolerable and we must act to fix it.

Several causes combined to produce this situation. Back in the ‘90s, courts ordered a change to assessments based on market prices. In 2002, the legislature repealed the inventory property tax on business, and switched from reassessment once a decade to once a year, or “trending”. And, the biggest factor of all, total local spending on schools, libraries, school construction, and other services has continued growing faster than taxpayers’ incomes. When that happens, property taxes can only go up.

We’ve been here before. Repeatedly over the last 35 years, state government has tried to help out. State taxes have been raised and the money used to subsidize local budgets and reduce property taxes. By now, 85% of school operating costs are paid for by our state taxes, not our property taxes. Half the sales tax, 3 cents out of 6, is sent back to support local government, or your property taxes would be far higher than they already are.

What we do next must learn from this history, because the old approach has not worked. In every case, a few years later our state taxes were higher and our property taxes were, too. It only took 5 years this time.

I have looked at every option for change. I have talked with Hoosiers all over the state. I have studied Indiana’s past approaches to this issue and the attempts of other states to deal with their own problems. When Indiana acts this time, and act we must, our steps must be fair, far-reaching, and final.

I have prepared and will recommend to the legislature a proposal to cut every homeowner’s property taxes sharply and cap them forever, at no more than one per cent of a home’s true value. This last provision must be added to the state’s constitution to ensure its permanence, and guarantee that no Hoosier ever again pays more than a penny on the dollar of their home’s value.

We can lower the average Hoosier property tax bill by more than a third by removing forever the rest of school operating costs, and the cost of protecting abused and neglected children, from the local to the state level. Immediate relief should be provided to every homeowner on the May ’08 bills, and the full 1% ceiling protection put in place by 2009.

We can fund this reform through a one-cent increase in the sales tax, and by using a small share of the surplus we have restored to the state budget these last three years.

Before settling on the cut and cap approach, I looked hard at the idea of totally eliminating property taxes in our state. 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. 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.

Any plan that makes a real difference in property taxation will have to go to its root cause, and that is excessive spending. Total local spending on school construction, libraries, fire departments, and all other local services simply cannot keep rising faster than Hoosier incomes.

To achieve better discipline while preserving local control, we must have single-point accountability for spending. Today, no one is responsible; each local taxing district sets its budget and sends you its part of the bill, which is only added up when it hits your mailbox. The County Tax Board in each county must accept the duty of reviewing the total of local spending plans and trimming those budgets as needed to keep our taxes down.

As further protection against overspending, we should strengthen taxpayers’ direct say in local decisions, especially the borrowing for new schools and other construction which has been the biggest driver of property tax increases. I will propose that any significant new capital project, or any spending in excess of the growth in local income, must be approved by voter referendum.

Next, we must protect other property taxpayers from being exploited. I will propose hard ceilings, with no exceptions and no loopholes, of 2% for rental properties and 3% for other businesses, also written into our constitution.

Finally, our unfair and unfixable assessment system must go. I will propose the elimination of all political assessors and the appointment by each County Council of a single, qualified and certified assessor to oversee trained professionals in conducting future appraisals.

Immediate relief for every homeowner; a one per cent permanent cap on every homeowner’s taxes; an end to unfair and inaccurate assessments; real limits on local spending. As bold as these changes would be, I am very optimistic of achieving them, especially if you will help.

In the last 3 years, we have already solved problems like the state government deficit and the state highway shortfall that people said would take years or were simply impossible. We can solve this one, too, and open a new era of opportunity in which Indiana is the nation’s leader in defending and promoting the American dream of home ownership.

Thank you and good night.

The Daniels Property Tax Plan:

- Cut every homeowner's prop tax bill
- Cap homeowner prop taxes at 1%
- Limit increases in local govt spending
- Appoint a professional assessor for each county

11 comments:

Anonymous said...

"Any plan that makes a real difference in property taxation will have to go to its root cause, and that is excessive spending. Total local spending on school construction, libraries, fire departments, and all other local services simply cannot keep rising faster than Hoosier incomes."

Unless it is to support the subdivisions of a few politically connected realtor/developers!

We all must pay out to support all the "growth" local Development needs to make payroll and to fund their Christmas Clubs!

"Pro-Growth" even if it bankrupts the taxpayer!

Anonymous said...

Busy body Mitch better not get in my way of funding the DCEDI and other growth producers such as Vieste!

Morris and Ewbank are rubbing each others shoulders, trying to console and comfort one another as they mull over and ponder what Democrat they will support in the next Gubernatorial election!

Anonymous said...

When Brett Fehrman and John Maxwell saw their last property tax bill, they decided then and there that their only course of action was to accelerate forcing others to subsidize their developments!

It is almost impossible for two “honest” guys such Brett and John to make do, while the State taxes them silly, without Brett and John sticking it to the rest of us!

I blame high property taxes for all of these two’s transgressions!

For all their future acts of "sewer theft" I hereby hold them harmless!

Alan S. Freemond, Sr. said...

Total local spending on school construction, libraries, fire departments, and all other local services simply cannot keep rising faster than Hoosier incomes.

If you'd rein in your development buddy/contributors' wasteful subdivisions we'd not have above mentioned problem.

So you want to increase the sales tax by about 9%,huh? Why have you given Honda 140 Million dollars in tax breaks, why did you see to it that Honda got 50 million dollars in cash? A lucky job applicant downh at honda might earn 31 thoudand dollars a year, that appears to be what they are spending on improvementds of your house every month, or is it every week?. Yeah, part time I live down the street from you, I see it all.

So what is a 9% sales tax increase to your contributors? Not a damned thing. But to some folks it significent

You wouldn't say a good word nor put in 5 damned cents for the campaign of the republican candidate for County Commsioner in Dearborn County. I asked you for your help. you didn't even have he courtesy to answer O. K. or forget it. Essentially your silence boosted the campaign of a democrat. Too minor an election? Well all politics is local. Want to bet me that Sodrel loses Daerborn County again to a beatable second class political hack?? Neither you nor the State Republican Chair, Murry Clark give a damn.

Are you scared of the Dearborn County RINO party? Are you a RINO?

When you want to run for president, as I believe that you do, I'll bet you that we won't help.

Anonymous said...

On the local level, maybe if a few development stooges would not use our tax dollars as their petty cash fund, that would go a long way in lowering our taxes!

Anonymous said...

Let us broaden our tax base by giving away tax abatements and forcing taxpayers to get loans to finance someone else's business interests.

While it may not "literally" broaden our tax base, it will help a few realtors/developers/bankers/lawyers pay their tax bills.

Anonymous said...

Crazy Al's at it again!

Anonymous said...

Crazy Al's at it again!

I see you graduated from your "Boogy Man" comments!

Now you are a two note dimbulb!

You probably have a bit of trouble in relationships, do you not?

Someday you will find the right person for you!

Someone who does not require both wit and intelligence in a mate!

adc said...

MItch's plan sounds relatively decent. But it does give the STATE more say in local government. Have local officials here done anything to be see how the locals want their government to be structured? Of is Mitch and the legislature deciding FOR us?
Having an assessor who hires outside appraisers sounds like more privatization.

Anonymous said...

"I will propose the elimination of all political assessors and the appointment by each County Council of a single, qualified and certified assessor to oversee trained professionals in conducting future appraisals.

Uh Oh!!!

Looks like we will soon have another member of Ewbank and Kramer as the Council Attorney for the County Council!!!

Anonymous said...

"3% for other businesses"---translation to that statement is farmers will pay 3%. This deal won't fly as written or stated...sorry Mitch.