Saturday, February 2, 2008


Not many of us take the time to read the Indiana Constitution. For one thing, it's boring and somewhat complicated to understand. However, there are two articles we would like to bring your attention to.

Article 1, Section 22.
The privilege of the debtor to enjoy the necessary comforts of life, shall be recognized by wholesome laws, exempting a reasonable amount of property from seizure or sale, for the payment of any debt or liability hereafter contracted: and there shall be no imprisonment for debt, except in case of fraud.

What does this mean? It means that under the Indiana Constitution, your property cannot be taken away from you or sold for not paying your property taxes.

Article 8, Section 2.
Taxes on the property of corporations, that may be assessed by the General Assembly for common school purposes.

This article means that school funding is to be paid for by corporate taxes, not property taxes.

So why has our state government been allowed to get away with not following the laws of the Indiana Constitution? That's a good question and one the citizens need to ask their legislators.
If we are expected to follow the law, shouldn't the same be expected of our elected officials?


If our county commissioners are looking for a pat on the back from taxpayers, forget it. The Good Government Initiative made recommendations that would save the taxpayers more than $5 million in job and spending cuts. What kind of reductions did the commisioners come up with? Only $460,000. You cannot be serious!

Is change really that hard or are the commissioners more worried about the loss of patronage and loyal voters?

The county should have a central human resources department that will hire qualified employees; not an elected official's spouse, sibling or children. How many jobs in county government are unfilled and have been unfilled for some time. If you haven't hired somebody by now, eliminate the position. It's apparent it's not needed. Eliminate the overstaffed positions in the clerk, auditor and treasurer offices. (20 deputy auditors, 26 deputy clerks, and 26 deputy treasurers) and crosstrain employees in these departments to maximize efficiency. Guess how many employees have been eliminated so far? A big fat goose egg!

Here's some food for thought for the commisioners. If you followed and implemented all the changes in the Good Government Initiative saving the Lake County taxpayers millions of dollars and reducing everyone's property tax bill, don't you think you would have the respect and loyality of the taxpayers? You would have job security without the patronage. This voter will be voting anti-incumbent on May 6th if more changes aren't made and made soon.

Wednesday, January 30, 2008


If you want to become an educated voter interested in the issues that affect the citizens and taxpayers of Indiana, here are two websites well worth getting acquainted with.

The 2007 voting record of our state legislators

Indiana Campaign Finance

When you go to the Indiana Campaign Finance site, click on Search. Then click on Contribution Search and then Search By Candidate. Type in the name of the legislator you want to see campaign records for and in the contribution section you can choose what type of contributor. The list will show who contributed, when they contributed and how much they contributed.
When you see who contributes and how much is contributed to a legislator's election campaign, especially all the law firms, PACs, and labor organizations, you will begin to understand why some of our legislators vote the way they do and the power of the lobbyists.
Let's have the last laugh on Tuesday, May 6th by using the power of our vote. Let's make a change for better government.


Senate Bill 20, which passed through the Senate with a vote of 48-0, gives Lake County new distribution options for a county option income tax. The options include:

1) Returning income tax money to property owners in the city or town in which the taxes are raised.
2) Distributing 60 percent of the money to property owners in the city or town in which the taxes are raised and the remaining 40 percent by population.
3) Applying the proceeds from the income tax to county government levies in order for all property owners to benefit equally.

Out of 92 counties, Lake County is the only county that does not have a county income tax. In 2007, the state legislature passed a state law freezing most local government budgets in Lake County unless a county option income tax was passed and designated for property tax relief. Local governments will take a $17 million hit this year with the freeze.

In December, the county council would not take action to override the county commissioners' veto of the income tax. However, Senate Bill 20 now breathes new life into the county option income tax, and the tax will most likely be resurrected at a February or March county council meeting.

No more taxes! Enough is enough! Making me pay an income tax to give myself property tax relief is ludicrous! I'm putting $5 back in my left pocket only to take $5 out of my right one. Cut wasteful spending (and there's enough to be cut), eliminate all the patronage and learn to live on a budget like most of us do. It's not that hard to figure out unless you're an elected official!

Sunday, January 27, 2008


Before our legislators throw millions of dollars down a black hole called the South Shore expansion, here are some questions that need to be answered:

1) If House Bill 1220 is going to divert $350 million in sales tax money away from the state, how will that affect the Governor's property tax reform plan?

2) Just exactly how much money is needed to plan and build South Shore commuter rail service to Lowell and Valparaiso? Do we have a firm price tag or is it just a guess right now?

3) Does the Northern Indiana Commuter Transportation District make a profit annually or are they subsidized by the state? Just look at the CTA and its continual money woes to see this is a valid question.

4) Rather than using STIF money to finance the South Shore expansion, could private investors be used to fund this project?

5) The Northwest Indiana Forum predicts the South Shore expansion will create 26,000 new jobs. What kind of jobs are they, are they permanent jobs, what kind of wages will they pay and where will they be located?

6) Is this sales tax diversion a one time deal or will it become permanent as the costs of building this commuter rail service go up? And undoubtedly, the costs will go UP.

7) The Northwest Indiana Forum also predicts new businesses will spring up around the South Shore expansion. Take a look at the Hammond, East Chicago and Hegewisch train stations. What kind of new businesses have located in those areas?

8) What kind of projections do we have for ridership on the Lowell and Valparaiso rail service? Does it justify spending this kind of money if only a small segment of the population is to be served?

9) Given the South Shore's history of delays and poor service, how will these issues be addressed with the new rail lines?

The public has a right to honest, legitimate answers to these questions. Not some political spin by public officials wanting to get re-elected and certainly not propaganda by those who stand to make alot of money from the South Shore expansion. Take what you read in all those glossy mailings with a grain of salt. Ask for and demand truthful answers from our legislators. After all, it is our money at the state and federal levels that will be spent!

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.