"IT IS THE DUTY OF THE PATRIOT TO PROTECT HIS COUNTRY FROM THE GOVERNMENT." - THOMAS PAINE (1737-1809)


Thursday, November 13, 2008

DLGF RULES AGAINST PETITION OBJECTION

In a six page opinion, DLGF Commissioner Cheryl Musgrave ruled against a petition filed by fifteen taxpayers challenging the City of Hammond's 2008 budget.


Members of Team Hammond Taxpayers' Group had presented the challenge at the DLGF hearing on October 30, 2008 in Crown Point.

The DLGF could not determine whether the petitition objection had been filed withing the 10-day time limit but decided to err on the side of the taxpayers. The Lake County Auditor's office was cited by Musgrave for failing to publish the approved tax rates within the 15-day deadline and for not time stamping the taxpayers' objection.

"A city's decision about its spending priorities is a policy decision under the purview of the city and its elected officials," Musgrave said. Therefore, allegations of "reckless spending" by the taxpayers did not constitute grounds by which the DLGF could overrule or void provisions of the city's budget.

In instances where a city officials uses tax dollars for a personal vacation, the DLGF or the State Board of Accounts could take action, but the DLGF found no such violations in the 2008 budget.

"The estimated budget published by the city is just that - an estimate - that is subject to change during the public budget hearing and adoption process," Musgrave said. The DLGF does not view mathematical errors as critical in the estimated budget. They are only estimates and are not the final amounts in the budget order.

Musgrave put the city's debt limit at $16.4 million which would not exceed the constitutional debt limit of 2 percent of the city's adjusted value of taxable property. Lease rental agreements for financing capital projects are not included in the 2 percent limit. Judgement bonds of $2.86 million was the only debt Musgrave found applicable to the state statute regarding debt limit.

Regarding government inefficiencies and taxpayer concerns, Commissioner Musgrave suggested taxpayers urge their local officials to action under the Government Modernization Act and the Home Rule Act.

Although Jim Premeske of Team Hammond was impressed with the quick response of the DLGF as the taxpayers had requested as well as the extensive citing of state statutes, he questioned the purpose of a public notice if the notice is not required to be accurate.

"The DLGF states taxpayer challenges are based upon estimates," he said. "What other figures could the citizens possibly have?"

He also challenged the DLGF's finding that the city only has a $2.86 debt limit pertaining to the state limit. "This must be creative accounting at its best," Premeske said.

After "cautious and detailed due diligence", Premeske said Team Hammond will have to decide if they want to pursue the matter further.

Posted by Team Hammond at Thursday, November 13, 2008

Tuesday, November 11, 2008

STATE APPROVES LAKE COUNTY TAX RATES

The DLGF (Department of Local Government Finance) gave approval to Lake County's property tax rates last Friday giving the go-ahead for county officials to begin calculating reconciliation tax bills for property owners.

Lake County Auditor Peggy Holinga-Katona says her office can begin figuring out the final tax bills which will be mailed out in January with payment due 15 days later.

Provisional bills were sent out earlier in October and contained half the tax relief enacted by state legislators. The other half of tax relief will be included in the January reconciliation bill.

Katona also said homeowners will be able to go to the county treasurer's website by the week of Thanksgiving to find out what they owe.

Posted by Team Hammond at Tuesday, November 11, 2008

Monday, November 10, 2008

NORTH TOWNSHIP TAXPAYERS HAVE THEIR SAY

By a vote of 25,305 to 17,550, voters chose to abolish the North Township Assessor's office and shift the duties to the county assessor.

And it is easy to see why the referendum to eliminate the North Township Assessor went the way it did on election day.

Despite John Matanovich's claim about the county having outsiders come in now to assess your properties, most of us remember the state calling in CLT to do Lake County's assessment because some (not all) township assessors were not fairly assessing properties to begin with.

How many of us had to go through the process of appealing unfair assessments, paying for appraisals, and dealing with the bureaucratic nightmare that went along with the appeals?

How many of us had to wait 1-1/2 to 2 years to get their first appeals straightened out?

How many of us have had to file more than one appeal because the township assessor refused to honor a state-certified appraisal and went back to the original CLT assessment?

How many of us are still waiting for resolution of their 2006 appeals, have overpaid their tax bills and are waiting for refunds?

And if the North Township Assessor's office was doing such a swell job, how come there continue to be so many appeals?

If an employee in the private sector does not do their job properly, they get fired and replaced with an employee who will.

Guess the voters finally got smart or fed up or both. Take your pick!

Posted by Team Hammond at Monday, November 10, 2008

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Blunt Proof of the Feasibility to Permanently Abolish Property Tax

IMMEDIATE RELEASE
Media Contacts:
Melyssa Donaghy 317-938-8913
Max Katz 765-409-6669
www.HoosiersForFairTaxation.com

BLUNT PROOF OF THE FEASIBILITY TO PERMANENTLY ABOLISH PROPERTY TAX.
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.

PROPERTY TAX HISTORY PREPARED BY DR. BILL STYRING
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.