Tuesday, February 5, 2008


We received this message today from Freedom of Speech Team, our activist friends in New Albany.

Our city is a train wreck about to happen. Our new mayor is our old mayor of 12 years ago. He is a crook and a bigger CROOK now. You cannot imagine what all he has done over the last 30 days- an $11,000 raise for himself. We now have 2 deputy mayors a 118 take home cars. In 16 years we have spend around $60 million dollars on sewers and we now have another $47 million to spend. They have been giving like $32 million dollars in 2007 in tax abatements. They have borrowed $5.3 million from sewer utility to cover our general fund and never paid it back. We have been to the city prosecutor, Indiana atty. general and even the governor and been told is too political.

You think you have it bad in other counties. Listen to this one:

My sister is the assessor for our county. I worked for her for 5 years. During the entire time I worked there she was cutting peoples' property taxes to get re-elected.

Her first deputy works doing income taxes for 3 months out of the year. She not only collects a salary FROM doing taxes but a nice check from City. It took me 2 years to figure out what was going on and then I started making copies of time sheets and everything I could get my hands on. I mean boxes of paper work.

Well to make a long story short, my sister came to my new home (I purchased Sept. 2003 and moved into November 2003) on Martin Luther King day 2004 and handed me my termination papers. And told me she didn't have to give me an excuse to terminating me. So we got a bunch of citizens and current employees together and created Freedom Of Speech, IN 2005. Of course I am the only person who knows who everyone is. People know I'd not tell if someone put a gun to my head. Our cars have been trashed, gasoline poured on my porch. Spray painted "Bitch " on my garage door. On my birthday there was a box on my porch wrapped in a telephone cord with a bullet tied to it. Of course I deny being with Freedom of Speech.

My entire family has turned against me because I promised my dad before he died if she ever fired me to take her down. Well, I have been sitting with all this information, video tapes, time sheets. They also collected comp time and are making a fortune in local government.

I couldn't afford to fight her over being fired. I could not afford an attorney. This entire town is a house of cards. It would be so easy to expose this corruption and all if someone would help. I have even considered going to the FBI. You folks think you have it bad you ought to be living here. We have cops following us everywhere.

They are playing a shell game with our city money. Our state board of accounts audits is down right criminal for 4 years. Employees have been overpaid, our parks department ran up a $10,000 cell bill in one month. State Board of Acccounts tell us they have no power.

We don't have money to fight them. People are scared and won't even attend council meetings. I wish someone had some ideas or answers how we can fight back. We're the little people, working class citizens and have no recourse. We just keep plugging along but what can we do?? I'd be willing to go into protective custody to blow the whistle on these crooked "bastards".....

No one will touch this I swear, I have been trying for 4 years....

BTW, I guarantee this could turn into a movie deal. This is nothing but pure corruption, ghost employment, criminal crap and all we want is help to put all these crooked bastards in jail.....!!!

I have all these documents and no one to help us!!!!!!!! We need more than a Tea Party in our hometown, trust me.

Freedom of Speech Team in New Albany

From Hoosiers for Fair Taxation
Tuesday, February 5, 2008

Blunt Proof of the Feasibility to Permanently Abolish Property Tax

Media Contacts:
Melyssa Donaghy 317-938-8913
Max Katz 765-409-6669

Hoosiers For Fair Taxation, Senator Delph, Representative Noe, Representative Elrod and many other legislators along with Stop Indiana, attorney John Price, Eric Miller's Advance America, and the Statewide Taxpayer Alliance know that property tax abolishment, without substantial increases in sales tax and income tax, is realistic and possible. The economist Dr. Bill Styring's 2/2/2 Plan demonstrates that the state of Indiana can completely replace property tax without changing the state's current spending habits.

Dr. Styring's plan does not account for positive changes in Indiana's economy that will undoubtedly follow the elimination of property tax such as heavy real estate investment and increased consumer spending due to increased statewide disposable income. The real estate investment in Indiana alone would cause such an economic boom that it could likely end our abandoned property and foreclosure crisis. Property tax elimination would also likely cause a surge in Indiana's population as more people locate to Indiana to take advantage of real estate purchase opportunities without the burden of property tax. With the population surge would come more sales and income taxes.

The General Assembly does not have to adopt a specific plan until the year 2011. In the meantime, we recommend that the General Assembly approves the 27steps outlined in the report prepared by the Sheperd Kernan commission. While the Governor's commission cannot forecast the savings to the state once the plan is implemented, there is no doubt that the savings would be substantial--perhaps equivalent to the the entire property tax burden currently placed on Indiana's homeowners because our legislators have not had the political will to liberate Indiana's governing structure and her taxpayers from the 19th century.

Our citizen networks will work to replace all legislators who do not support property tax repeal in the November 2008 election.

The 2/2/2 Plan, to replace property taxes in Indiana based upon the latest revenue forecast (07/08 fiscal, estimate):

1) Current IN sales tax (state level rate of 6%): $5.601 billion2% increase would yield an additional $1.867 billion

2) Current corporate profits tax: ~$2 billion

2% increase would yield an additional $.286 billion ($286M)

3) A 2% statewide average of the COIT would yield $2.705 billion to cover local civil units of gov.

By adding these three together ($1.867 billion + $.286 billion + $2.705 billion), a total of $4.858 billion is realized; enough revenue to replace property taxes.

Indiana has a 70-plus year history of attempts to lower property taxes by raising other, non-property taxes. In every case these have failed miserably. The new taxes, or higher rates on old taxes, remain in place. And, in short order, property taxes rise back to their old levels, poised to roar even higher.

--1933. General Assembly imposes two new taxes: an individual gross income tax and a corporate gross income tax. The morgue of the Indianapolis Star indicates that the political leadership at the time said this was for property tax relief (1933 was the pits of the Great Depression, and people were losing their homes. Home prices declined by over 40% in the 1929-1933 period). Property tax relief was nonexistent. The state used the money to bail out the state's own finances.

--1963. General Assembly imposes a new sales tax at a rate of 2% and changes the 1933 individual gross income tax (from 1933) to an adjusted gross income tax (the one we have now) at a rate of 2%. Again, the ostensible reason was for property tax relief and again little PTR was forthcoming.

--1967. Those 1963 tax changes were raising more money than projected. The GA decides to give back 8% of sales and income tax revenue to local government for property tax relief. Local units spent the money. No PTR.

--1973. Gov. Otis Bowen launches the most determined PTR offensive yet. The sales tax goes to 4% and a new corporate supplemental net income (profits) tax is imposed. Strict property tax levy controls are imposed. It works... for a time. By 1980, property taxes adjusted for inflation are some 30% lower than in 1973. When Bowen leaves office the levy controls are relaxed. By the end of the decade, property taxes (adjusted for inflation) are back to 1973 levels. The doubling of the sales tax rate from 2% to 4% remains in place, along with the new corporate SNIT.

--2002. More fiddling with the sales tax in the hope of property tax relief. The results of this are obvious, or we wouldn't be debating the current property tax mess. All of this suggests that unless the property tax is totally ripped up by constitutional amendment, the assessment and collection mechanism dismantled, it will grow back. The PTR-inspired hikes in other taxes remain. That is our history. It is a terrible deal for taxpayers.

2. A vote in the 2008 legislative session for a constitutional amendment to repeal property taxes does not amend the constitution. It merely starts the amendment process. Amendments must be passed by two consecutively elected General Assemblies, then submitted to a referendum. Thus any amendment passed by the '08 Assembly must be passed by either the 2009 or 2010 legislatures, then submitted to the voters at the 2010 general election. The General Assembly does not need to decide on a "replacement revenue" package until the 2011 session.

3. What might such a "replacement revenue" package look like? The particular answer will come from the 2011 General Assembly and cannot be determined now (if for no other reason than forecasting state level taxes and property taxes out that far would be a most unreliable exercise. No one need be locked into any particular plan just yet. However, as an illustration that a replacement plan is feasible and less scary than many fear (we don't need to be talking about a 12% or 13% sales tax ... in fact, we should not be), consider just this one possibility.

Local sales taxes are generally very bad policy, for a whole host of reasons too numerous to mention in this short sketch. Sales and corporate taxes are best levied at the state level. It happens that roughly a 2% increase in the sales tax and a 2% increase in the corporate profits tax roughly take care of school propertytaxes. The loss of local control by the state assuming school property taxes is minimal. About the onlylocal control left is on building projects.

For local civil units, a statewide average increase in the individual adjusted gross income tax of about 2% suffices to replace local civil government property taxes, higher than 2% in some units, less than 2% in others.

Thus, a "2-2-2" plan~2% sales and 2% corporate profits at the state level for schools and a 2% average on personal income taxes for civil units—is about what would be needed. This is merely a ballpark projection to 2011.

There may be better plans, it's really a policy question for the General Assembly: do you want to make the trade of something like this in exchange for no-property-taxes-forever-on-anything? Everyone understands "zero."

4. Are there "practical problems? Of course. The two identified are how to make the civil government transition from a property tax base to an income tax base, and how to handle debt backed by property taxes. Without elaborating, the former can be handled using locator software (Map quest-type programs). The debt problem might be handled by treating the current state paid PTRC's as in lieu of property taxes (which they are) and paying PT-backed debt service from each unit's own PTRC.

Conclusion: Total elimination of the property tax via constitutional amendment is the only way to give property tax relief that will stick. The other tax action necessary to achieve this goal—in 2011-are large but not so scary as "a 13% sales tax." They are feasible. The question is for the General Assembly. Are we going to once again go down that 70-odd year path of failed PTR policies or are we going to rip the property tax up by the roots?

Posted by Hoosiers For Fair Taxation on Friday, January 4, 2008.