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


Wednesday, February 25, 2009

RECAP OF TEAM HAMMOND MEETING

A decent turnout attended the Team Hammond general meeting at the Galaxy Hall in Hessville on Tuesday night.

George Janiec opened the meeting with an update on the February county council meeting. Most of the county council meeting centered around a hobby farm in unincorporated Lake County; how many roosters are too many and how many roosters are not enough? After much spirited debate, a compromise was finally reached.

He also talked about the county option income tax. The issue is not dead and can be resurrected at any time. County Commissioners Scheub and DuPey are still adamant about vetoing the income tax. Pressure needs to continue on our county council members to vote against an income tax.

George also touched on the food and beverage tax as a funding mechanism for the RBA and the elimination of bus service not only in Hammond but in Gary and East Chicago too. House Bill 1660 will create regional transportation districts in each of Indiana's 92 counties. These districts will have the power to enact a county option income tax, a county economic development tax, a food and beverage tax, and fees on vehicles. The RTD boards will be made up of local elected officials. House Bill 1660 likely will not pass the General Assembly this year but will most likely be resurrected in the 2010 legislative session. Taxpayers need to urge their legislators to vote against this taxpayer unfriendly legislation.

The single most important legislation in the 2009 General Assembly is Senate Joint Resolution 1, which would make the property tax caps permanent. It needs to be voted on and approved in this legislative session in order for a voter referendum to take place in 2010. House Speaker Pat Bauer is dragging his feet on SJR1 because he feels the ramnifications of the tax caps on city and county governments are not fully known. However, every year they delay in approving SJR1 only makes permanent tax relief harder to achieve.

Monday night's Hammond city council meeting was covered next. Councilman Kalwinski introduced a resolution rescinding Councilman Bob Markovich's appointment to the Port Authority Board. Attorney Berger said Markovich could only be removed if there was malfeasance in office. After much discussion, appeals and tabling of motions, the council voted 5-4 to rescind Markovich's appointment. Larry Rapchak reported that at the premeeting of the Port Authority, Councilman Markovich had not been allowed to take his place on the Port Authority Board. The matter will most likely end up in court.

Larry Rapchak next gave an update on the E-verify legislation (Senate Bill 580) pending in the General Assembly. E-verify legislation was eliminated from the federal stimulus package so it is very important that Indiana approve Senate Bill 580. E-verify is a simple process employers can use to verify if new employees are legal citizens. Senate Bill 580 is taxpayer friendly.

JoAnn Palko covered two more bills in the General Assembly. Senate Bill 452 would move municipal elections to even numbered years, move school board elections to the fall elections, consolidate precinct polling places in centralized voting centers, and ban public employees from running for office in the same entity in which they work. Senate Bill 232 which would have given the judges the right to fine public entities for violating open-door and public records laws. This legislative has been voted down but hopefully, can be revived before the legislative session ends in April.

Palko also stressed it is important to continue to contact your state representatives and state senators about pending legislation in the General Assembly especially SJR1, House Bill 1660, Senate Bill 580, and Senate Bill 452. Handouts were given with contact information on our area state legislators.

On Tuesday, March 3, 2009, there will be a rally at 5:00 p.m. against the proposed 15% NIPSCO rate increase at Savannah Hall at Indiana University Northwest. The event is hosted by the Indiana Utility Regulatory Commission (IURC), and it is important to give the IURC your input as to why this rate increase should not be granted.

On Friday, March 6, 2009, Team Hammond Taxpayers' Group and other taxpayer advocates will be meeting with Governor Daniels to discuss government reform. The meeting will take place in the Griffith High School auditorium. The time of meeting will be forthcoming as soon as details are firmed up with the governor's staff.

On Wednesday, March 25, 2009, there will be a taxpayer rally at the Indiana State House for Hoosiers who are fed up with their government. The rally begins at 11:30 a.m. (10:30 our time).
Taxpayer groups from around the state will be in attendance, and there will be press coverage of the event. Carpooling will be available for those who would like to attend. This is the time to make your voice heard.

Team Hammond's next meeting will be on Tuesday, March 31 at the Woodmar United Methodist Church. On the agenda is public safety (with info on gangs in Hammond) and crime statistics. Guest speakers for the evening include Hammond Police Chief Brian Miller.

Meeting was adjourned at 9:00 p.m.

Posted by Team Hammond at Wednesday, February 25, 2009

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.