Thursday, February 21, 2008


INDIANAPOLIS (Feb. 20, 2008) – The Department of Local Government Finance (DLGF) today announced live streaming video will be available in 2008 for the meetings of Indiana’s two Property Tax Control Boards.

“By providing this service, the DLGF is striving for better accessibility of meetings to the public and greater accountability of local officials,” Commissioner Cheryl Musgrave said. “Access to public meetings should not be limited to those able to attend during working hours or to travel to Indianapolis.”

Links to the live streaming will be available from the Department’s Web site at www.in.gov/dlgf/boards/ and will first be available during the Feb. 21 meeting of the School Property Tax Control Board (agenda attached). Additionally, a video of the meeting will be available on the Web site within 24 hours of the meeting adjournment.

The School Property Tax Control Board and the Local Government Property Tax Control Board meet each month (except January) to review construction plans and listen to local officials who seek approval for construction projects. After thorough review, the Boards – comprised of experts in the fields of business, engineering, architecture and education – make recommendations to the Commissioner of the Department to approve, disapprove or modify projects.

Once she receives the recommendations, the Commissioner is the approval authority for the projects. Each request is considered on a case-by-case basis using information related to local opposition and support, property tax impact and the needs of the local community.

This tool is the latest in several additions made to the DLGF’s Web site, making property tax information more readily available and transparent to Hoosier taxpayers.

Last month, the DLGF launched an online toolkit for citizens who want to object to new construction projects. The Citizen’s Petition and Remonstrance Toolkit is available online to assist Hoosiers in understanding the complicated objection process required by law. In December, the DLGF began videotaping the Tax Control Board meetings and making the video available on its Web site.

“Videotaping the meetings and making them available on the Web site was the first step in increasing accessibility for Hoosiers,” Musgrave said. “We have now taken the next step by giving real-time access to taxpayers across the state.

In fall 2007, the DLGF launched its first searchable databases, which provide sales disclosure and assessment information on properties statewide. The tools can assist taxpayers in the assessment appeal process and enable Hoosiers to search for other properties in the area defined as a neighborhood by their assessor. The DLGF also prepared county summaries to provide taxpayers with information about property taxes and budgets of governmental units in their area.

The search tools and information are available from the DLGF's home page at www.dlgf.in.gov.

From Hoosiers for Fair Taxation
Wednesday, February 20, 2008

Wednesday, February 20, 2008


How much more bond debt does the School City of Hammond have to accumulate before they realize they have the taxpayers in over their heads? When all the homes are boarded up because people have either lost them to foreclosure or just abandoned them?

The School City has built five new elementary schools in the past five years--O'Bannon, Jefferson, Irving, Harding and Joseph Hess. In addition, Clark, Morton Elementary, Morton High and Edison either had extensive remodeling or additions built.

As of December 31, 2005, the School City's outstanding principal and interest debt was $382 million, and this doesn't even include the costs of the new Harding and Joseph Hess schools. Who knows how much the debt is as of February 2008?

With this much debt, can the taxpayers of Hammond really afford a new high school?

Apparently, the Superintendent and the school board think we can because they are willing to spend another $100 million to build this new high school. And you know it will cost that and even more because of cost overruns and miscalculations in construction costs. Nothing ever costs what the original bid price was.

Are Superintendent Watkins and the School Board also not aware of Governor Daniels' plan to standardize school building plans to hold down construction costs? Are they also not aware of the amendment to House Bill 1001 to give citizens the right to a referendum on major building projects. Do they think these laws would apply to everybody else and not them? We hope they're not trying to pull a fast one!

And we're not saying the students of Hammond should not be properly educated in order to compete in the 21st century. Far from it. But a new building does not an education make. If that argument was true, then there would be no learning going on inside the University of Chicago Lab School. Despite the shabby condition of the building, many successful students graduate from there. Could it be because the emphasis is on the students' education and not the building. Could it also be because they demand success and not excuses for failure.

If the School City was really fiscally responsible, they would pay off their bond debt before they even entertain the idea of building a new high school because frankly, we taxpayers are tapped out.

Guess we better get out those remonstrance petitions. We're gonna need them and soon.

Sunday, February 17, 2008


I was talking shop a couple weeks ago with an East Chicago police officer and we agreed as a result of a proposed property tax cap, there will be threats by politicians to cut public safety.

As it turns out, we were psychics.

"Our response time will worsen and there will be deaths," Hammond Fire Chief (and former Democratic city chairman) Dave Hamm said on a Feb. 11 trip to Indianapolis to protest Gov. Mitch Daniels' plan to cap property taxes and raise the sales tax. "Do not take that as a threat. It's just a matter of fact. It's going to happen.

"Cut my budget and people will die! Their blood will be on your hands, Mitch!

Bull-loney. You will accept that only if you accept that a mayor will make his deepest cuts at the public safety level.

If the city is in trouble, why did Hamm's salary jump $15,000 in January? Why did Police Chief Brian Miller's jump the same amount? I know most companies facing a shortfall don't increase salaries -- even for executives -- by 24 percent.

If the city is in trouble, why is Mayor Tom McDermott Jr. talking as recently as late January about a new city hall downtown? You don't propose multi-million dollar capital projects out of one side of your mouth and talk about gutting your police and fire departments out of the other.

If the city is in trouble, why was City Attorney Kris Kantar paid more than $10,000 in the first two weeks of the year? And why were five lawyers working on litigation over the closure of the health department, including McDermott's campaign manager, Kevin Smith?

Smith discounts his fee for the city, but he doesn't have to worry about his client paying.

If the city is in trouble, why is there a $250,000 legal aid clinic funded by McDermott with casino money? Because it's been staffed by lawyers like Lisa Berdine and Kris Costa-Sakelaris, both of whom are related to former city council members?

If the city is in trouble, why are some council members fighting McDermott's decision to close the city's health department and allow the county to take over the $648,000 responsibility? When the household income shrinks, you eat more meat loaf and less steak.

It's also disingenuous to neglect to mention Hammond, while losing property tax money, will be getting a big chunk of that back in the form of the increase in sales tax.Hammond doesn't need to cut cops and firefighters. It needs the right priorities.

Now where have I heard that before?

The opinions are solely those of Mark Kiesling. He can be reached at http://us.f834.mail.yahoo.com/ym/Compose?To=markk@nwitimes.com or (219) 933-4170.

From The Times
Sunday, February 17, 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.