The Team Hammond Taxpayers' Group will hold a general meeting on Tuesday, September 21, 2010 at the Woodmar United Methodist Church, 7320 Northcote Avenue in Hammond. Meet and greet will begin at 6:30 p.m. with the general meeting to follow at 7:00 p.m.
Guest speaker for the evening will be Aaron Smith of Watchdog Indiana who will speak on the tax caps referendum in November. Watchdog Indiana is a non-profit, non-connected and non-party advocate for good government that focuses on the state and local tax burden of Hoosier working families.
Everyone is invited to attend and become informed on the issue of placing the tax caps in the Indiana Constitution. For more information, contact George Janiec at (219) 678-6761.
Monday, September 20, 2010
The Team Hammond Taxpayers' Group will hold a general meeting on Tuesday, September 21, 2010 at the Woodmar United Methodist Church, 7320 Northcote Avenue in Hammond. Meet and greet will begin at 6:30 p.m. with the general meeting to follow at 7:00 p.m.
Posted by Team Hammond at Monday, September 20, 2010
Friday, June 25, 2010
Posted by Team Hammond at Friday, June 25, 2010
Posted by Team Hammond at Friday, June 25, 2010
Tuesday, May 18, 2010
Posted by Team Hammond at Tuesday, May 18, 2010
Monday, May 3, 2010
Are you aware the school city is in debt to the tune of $450 million dollars? That is more than all of the taxing units in Vanderburgh County which includes the city of Evansville. Tack on a new high school and you're looking at debt of more than half a billion dollars.
Posted by Team Hammond at Monday, May 03, 2010
Thursday, April 22, 2010
Posted by Team Hammond at Thursday, April 22, 2010
Friday, February 19, 2010
Posted by Team Hammond at Friday, February 19, 2010
Posted by Team Hammond at Friday, February 19, 2010
Thursday, January 28, 2010
Lawmakers today approved Senate Republicans' sweeping redistricting reforms establishing objective guidelines for creating legislative and congressional districts after the 2010 census and requiring an in-depth bipartisan review of redistricting best practices used by states.
"In the past, there has been little guidance in either the Indiana law or the Indiana Constitution regarding redistricting," said Sen. Connie Lawson (R-Danville), author of the legislation. "These new objective principles will be very helpful to lawmakers in constructing new legislative and congressional districts next session and beyond."
Lawson said Senate Bill 80, which passed by a vote of 47-1, will require lawmakers to consider the following factors when drawing future districts:
• Preservation of traditional neighborhoods;
• Preservation of local communities of interests;
• Protection of minority voting rights;
• Simply-shaped, compact districts; and
• Respect for county and precinct lines.
Senators also voted 45-3 to approve legislation creating an in-depth bipartisan study of best practices of other states. Senate Bill 136, co-authored by Lawson, would establish the Redistricting Study Committee and task the panel with examining ways to improve the redistricting process including proposals to establish an independent commission to draw legislative and congressional district boundaries.
"This committee will openly discuss what is and is not working among the other 49 states' redistricting efforts," Lawson said. "I believe it's important we take the time to allow Hoosiers the opportunity to share their thoughts on the redistricting process so we can make a decision that best serves them in the future."
SB 80 and SB 136 now move to the House of Representatives for further consideration.
From Indiana Senate
Posted by Team Hammond at Thursday, January 28, 2010
Thursday, January 21, 2010
On Tuesday, November 2, 2010, Hoosier voters will decide in a referendum whether or not they want the property tax caps placed in the Indiana Constitution.
The Senate voted 35-15 on Tuesday to approve the tax caps; the House approved the caps on January 12, 2010. With both legislatures approving the measure, the way is now paved for the
voter referendum in November. The referendum requires a majority to make the caps permanent and place them in the Constitution.
Four Senators from Northwest Indiana voted against making the caps permanent: Senator Karen Tallian, Ogden Dunes; Senator Lonnie Randolph, East Chicago; Senator Earline Rogers, Gary; and Senator Jim Arnold, LaPorte.
Senator Tallian voted against making the caps permanent because she feels they aren't a good solution to the property tax mess. Senator Rogers also voted no. She feels it's too premature to make the caps permanent because the full effects of the caps haven't been felt yet.
If voters approve the referendum, property tax rates would be capped at 1% for owner-occupied homes, 2% for rental properties and farmland and 3% for business and industrial properties. To pay off county debt, however, taxpayers in Lake and St. Joseph Counties will be charged at a rate above the cap until 2019.
Property taxes have impacted most Hoosiers throughout the state; some counties have been hit harder than others. It should be up to the voters to decide whether or not the caps should be made permanent and just how much government they can live with and live without.
Posted by Team Hammond at Thursday, January 21, 2010
Tuesday, January 19, 2010
The next Team Hammond general meeting will be Tuesday, January 26, 2010 at the Woodmar United Methodist Church, 7320 Northcote Avenue. Meet and greet begins at 6:30 p.m. with the general meeting to follow at 7:00 p.m.
Items on the agenda include property tax caps, elimination of townships, House Bill 1001 (lobbying reform) and updates on city and county council meetings and the Hammond school board meeting.
Any interested in property tax reform and good government are welcome to attend. For more information, contact George Janiec at (219) 678-6761.
The Indiana Senate Tax and Fiscal Policy Committee has a public hearing scheduled for Thursday, January 21, at 9:00 AM, on Senate Bill 309.
SB 309 is best identified as Business-As-Usual-Bill #1 because it is the first General Assembly bill to increase homeowner property taxes to have a public hearing scheduled since the 2008 property tax reform program.
Please contact your State Representative and State Senator to let them know that you oppose BAUB #1. Information on how to identify and contact your State Representative and State Senator can be found at http://www.finplaneducation.net/general_assembly_ratings.htm.
The property tax reform program passed by the General Assembly in 2008 will lower 2010 total property taxes $610.6 million and 2011 total property taxes $534.0 million when compared to the 2007 statewide total property tax burden. The portion of the total property tax savings that will be enjoyed by homesteads is $457.4 million in 2010 and $401.9 million in 2011. The total combined $1.1446 billion property tax savings comes from two property tax reform categories.
1. The 1% - 2% - 3% property tax caps will provide $953.6 million of the combined $1.1446 billion in 2010 and 2011 total property tax savings. The 1% homestead property tax cap will provide $249.6 million of the combined $859.3 million in homestead property tax savings. This property tax reform category would be protected by passage of the constitutional amendment that is expected to be on the ballot this November.
2. The remaining $609.7 million in 2010 and 2011 homestead property tax savings comes mostly from the 35% supplemental homestead deduction, the state assumption of school general fund expenditures, and the qualified senior homestead credit. The state assumption of school general fund expenditures will help provide property tax savings for other property classes. This property tax reform category is susceptible to erosion by the General Assembly.
BAUB #1 will increase 2010 and 2011 statewide total property taxes $116.5 million by allowing the limit on school corporation expenditures from the capital projects fund for utility services and property and casualty insurance to increase from 3.5% to 6% of the 2005 school formula revenue. BAUB #1, which is authored by State Senator Ron Alting (Lafayette), will increase homestead property taxes $35.4 million statewide.
The state has assumed MOST school general fund expenditures, while school capital project funds get their revenue from property taxes. There has been a LOOPHOLE the past several years where school capital project funds are used to help pay for the school general fund expenditures of utility services and property and casualty insurance. BAUB #1 will make this property tax LOOPHOLE bigger.
Instead of increasing the LOOPHOLE limit, school corporations should be encouraged to find more efficient ways of handling their general fund expenditures such as insurance pools for purchasing property and casualty insurance. ALSO, allowing BAUB #1 to pass would encourage school corporations to further abuse the integrity of their capital project funds by trying to include additional general fund expenses such as maintenance and health insurance expenses.
Informed Hoosier taxpayers must insist that their General Assembly public servants oppose the property tax abuse in BAUB #1.
From Watchdog Indiana
Monday, January 18, 2010
STATUS: HB 1001 was passed by the House Rules and Legislative Procedures Committee 9-0 on December 16, 2009.
TESTIMONY - December 16, 2009 - House Rules and Legislative Procedures Committee:
HB 1001 can be evaluated from two vantage points: (1) will the actions of lobbyists and contractors to affect government outcomes become more transparent, and (2) will ordinary citizens have a better chance to affect government outcomes.
HB 1001 is Taxpayer Friendly because it will INDEED make more transparent the actions of lobbyists and contractors to affect government outcomes. The nineteen Taxpayer Friendly provisions of HB 1001 are listed next.
1. The minimum reportable amount for the total daily gifts to a legislator or legislative employee given by a registered lobbyist is reduced from $100 to $50.
2. The minimum reportable amount for a single gift received by a legislator or legislative candidate is reduced from $100 to $50.
3. An individual who holds a state elected office and ceases to hold the state office after June 30, 2010, may not be registered as a lobbyist for 365 days after expiration of the term of office.
4. An individual who holds a position in the executive branch appointed by the Governor (other than a special state appointee) and who ceases to hold that appointment after June 30, 2010, may not be registered as a lobbyist for 365 days after ceasing to hold the appointive position.
5. A member of the General Assembly may not be registered as a lobbyist for 365 days after ceasing to be a member of the General Assembly.
6. The Governor and Governor candidate committees may not solicit campaign contributions, accept campaign contributions, and conduct other fundraising activities during the long session of the General Assembly and during the day before, the day of, and the day after each organization day.
7. Legislators may not solicit campaign contributions, accept campaign contributions, and conduct other fundraising activities during the long session of the General Assembly beginning in January.
8. Persons with contracts with state government, or who bid on contracts with state government, and certain persons affiliated with the contractors and bidders may not make political contributions to an individual who holds a state office or is a candidate for a state office.
9. State employees in the executive branch who have purchasing or procurement authority may not solicit political contributions unless the soliciting individual is a candidate for public office.
10. If a candidate or a candidate’s committee receives a contribution from a person who is prohibited from making a contribution, then they are required to pay an amount equal to the value of the contribution to the Election Division within 30 days of receiving the contribution.
11. The Election Commission shall assess a civil penalty equal to the greater of two times the amount of any prohibited contributions received, or $1,000.
12. Persons with contracts with state government, or who bid on contracts with state government, must register with the Indiana Department of Administration (IDOA).
13. The IDOA must make the information about state contractor registrants available in a searchable database on the IDOA’s web site.
14. State contractor registrants must notify their affiliated persons that they are registered.
15. A civil penalty of not more than $1,000 may be assessed for each business day that a person knowingly or intentionally fails to update a state contractor registration, fails to provide material information on a registration, or states false information on a registration. These penalties are in addition to any investigative costs incurred.
16. Contractors or bidders who violate the registration statutes may be found nonresponsible and have their contracts voided.
17. State officers, employees, and appointees in the executive branch may not accept inherently incompatible outside employment.
18. The Inspector General must create procedures for the issuance of advisory opinions granting approval for certain state employees to have outside employment.
19. If state contractors recklessly, knowingly, or intentionally make prohibited contributions, then they commit a Class B misdemeanor.
Special note should be made of the HB 1001 provisions that keep those who hold a state elected office and a position in the executive branch from joining the lobbyist ranks before a year goes by after they leave their office or position. The public good is NOT served if a public servant is using his current government influence as part of a lobbyist job application.
Special note should also be made of the HB 1001 provisions that keep persons affiliated with state government contractors and bidders, and executive branch employees who have purchasing or procurement authority, from making or soliciting political contributions for state office candidates. These provisions help prevent an egregious potential abuse that has not received a lot of public attention.
The "conflict of interest" provisions in the bill should be deleted. It should be the responsibility of a client to determine if a prospective lobbyist representing other clients involves a conflict of interest.
It is hoped that the legislative gift reports that include the lowered $50 minimum reportable amount will be made accessible online in a searchable database.
Because they require a change of heart rather than legal remedy, HB 1001 cannot be expected to lessen the obstacles to ordinary citizen Statehouse influence that are listed next.
(1) Ordinary citizens will have no greater success in getting face-to-face meetings with their Governor and General Assembly leaders to discuss important legislative matters.
(2) Ordinary citizens will have no greater success in getting their Governor and General Assembly leaders to take their phone calls about important legislative matters.
(3) Ordinary citizens will have no greater success in knowing whether or not their Governor and General Assembly leaders have read their letters and E-mails about important legislative matters.
(4) Ordinary citizens will continue to not have the same time as lobbyists to make their points during public hearings.
In conclusion, HB 1001 is Taxpayer Friendly because it will make more transparent the actions of lobbyists and contractors to affect government outcomes. However, HB 1001 will not lessen the obstacles to ordinary citizens trying to influence the decisions made at their Statehouse. On balance, HB 1001 represents a step forward in open governance and should be passed out of this Committee.
From Watchdog Indiana
Posted by Team Hammond at Monday, January 18, 2010
Thursday, January 7, 2010
1. Property tax relief will not disappear.
A recent example of how property tax relief CAN disappear is the 20% statewide sales tax increase that was imposed by Indiana's General Assembly effective December 1, 2002. Hoosiers were told by their General Assembly public servants that the sales tax increase from 5% to 6% would be used to lower homeowner property taxes by an average of 16.3%. Starting in 2003 and continuing through 2007, seventeen legislative and administrative actions taken by the Governor and General Assembly, together with increased local government spending, decreased the promised 16.3% homeowner property tax relief to just 2.4%. Details of this disappearing property tax relief can be found at http://finplaneducation.net/betrayal_incompetence.htm.
The General Assembly once again increased the statewide sales tax from 6% to 7% on April 1, 2008, to pay for another round of property tax relief. This latest property tax relief is based on the following legislative changes in the 2008 property tax relief bill: property tax caps based on assessed value, required referenda before the caps can be bypassed, $45,000 standard deduction from homestead assessments, 35% supplemental deduction from most homestead assessments, seniors homestead deduction, state assumption of seven property tax levies, local option income taxes for property tax levy replacement and relief, unelected governing body budgets approval. Full details regarding the 67 provisions in the 2008 property tax relief bill enacted by the General Assembly can be found at http://www.finplaneducation.net/2008_property_tax.htm.
According to the Statewide Property Tax Report from the Legislative Services Agency for the 68 counties for which data were available as of September 2009, Pay 2009 property taxes were lower than Pay 2007 property taxes for 95.5% of homeowners by an average of 32.2%. Homeowners received so much tax relief from homestead deductions that most were below the 1.5% cap (which becomes 1% in 2010). More rental housing owners got relief from their 2.5% cap (which becomes 2% in 2010) because much of this property is located in cities and towns where property tax rates were higher. Commercial, industrial, and utility real and personal property owners reached their 3.5% cap (which becomes 3% in 2010) only in those counties with particularly high tax rates. Agricultural property taxes increased due to a hike in the base rate of farmland from $880 per acre to $1,250 per acre, although the eliminated school general fund levy helped to limit the increase.
Largely because of General Assembly actions to accommodate single-interest groups, the promised homeowner property tax relief in 2003 had just about completely disappeared in 2007. The current property tax relief can also quickly disappear because every one of the provisions in the 2008 property tax relief bill is subject to erosion by the General Assembly and the operations of the market value assessment system. The farm and business lobbies are now pressuring state legislators to reduce the 35% supplemental homestead deduction, which is primarily responsible for the property tax relief currently being enjoyed by homeowners. Dramatic reductions in commercial property values (up to 40% in some areas of Indiana) will drive up property tax rates starting in 2010. In spite of the fact that individuals bear 85% of the sales tax burden that is supposed to pay for property tax relief, homeowner property tax relief is in jeopardy of once again disappearing.
According to the latest Indiana Handbook of Taxes, Revenue, and Appropriations, the Pay 2007 residential and agricultural homestead net property tax levy was $2,079,168,461 and net assessed value was $133,556,884,478. This means that in 2007 the average Indiana homeowner had a property tax burden that was 1.6% of assessed value. In addition, the Governor reported that 55% of 2007 homeowners had a property tax burden that was 1% or more of assessed value. These facts emphasize the importance of the 1% homeowner property tax cap that the 2008 property tax relief bill implements in 2010. The 1% property tax cap keeps the average homeowner property tax bill from returning to the 2007 level of 1.6% of assessed value. Even for those 80% of homeowners that paid less than 1% of their assessed value in property taxes in 2009 (according to estimates by the state's OMB), the 1% cap provides predictability and assurance that property taxes do not become an unaffordable burden.
The 1% homeowner property tax cap in the 2008 property tax relief bill is so important as a protection against disappearing property tax relief that it is included as part of a constitutional amendment in the identical bills House Joint Resolution 1 and Senate Joint Resolution 1. HJR 1 and SJR 1 must pass the State House of Representatives and State Senate respectively during the 2010 General Assembly session so voters statewide can decide by referendum on November 2, 2010, if the property tax caps are included in the Indiana Constitution. If the referendum passes, the property tax caps will become a permanent part of the Indiana Constitution where they cannot be changed by the General Assembly or court challenge.
2. Legislative-only property tax caps will not disappear.
Indiana General Assembly efforts to establish property tax caps have a short history.
(1) House Bill 1001, signed by the governor on March 24, 2006, established a property tax cap on homesteads, apartment complexes, and other residential rental property equal to 2% of the assessed value beginning in 2007 for Lake County and 2008 for all other counties. The 2% cap was to be extended to all other real and personal property in 2010.
(2) House Bill 1478, signed by the governor on May 11, 2007, virtually eliminated the property tax relief that the caps passed in 2006 were supposed to provide. The disappearing property tax relief came about because of the provisions listed next. (a) School general funds were exempted from the property tax caps - a school corporation’s local tuition support property tax levy could not be reduced because of revenue lost to the caps. (b) Redevelopment commissions and TIF governing bodies could exclude TIF replacement levies from the property tax caps. (c) The 2% cap would apply only to homesteads, instead of all residential property, in 2008 and 2009. (d) The cap that begins in 2010 for all other real and personal property increases to 3% from 2%. (e) A petition for relief (that would increase property tax bills in excess of the caps) could be submitted to the Circuit Breaker Appeal Board if a taxing unit loses at least 2% of annual property tax revenue to the caps.
(3) House Bill 1001, signed by the governor on March 19, 2008, replaced all prior property tax caps with the following caps on gross assessed value beginning in 2010: (a) 1% on homestead property; (b) 2% on other residential property (residential rentals, apartments, mobile home land, long term care facilities); (c) 2% on agricultural land; (d) 3% on other real property; (e) 3% on personal property. For 2009, these caps are phased in at 1.5% - 2.5% - 3.5%.
It is alarming how quickly the 2% property tax cap established in 2006 was pretty much wiped out by legislative betrayal the very next year! The 1% - 2% - 3% caps enacted by the General Assembly in 2008 must be enshrined in the state constitution to protect them from legislative repeal and legal challenge.
The 1% - 2% - 3% property tax caps are included as a constitutional amendment in Senate Joint Resolution 1 and House Joint Resolution 1, which are identical bills that must pass the State Senate and the State House of Representatives respectively during next year's General Assembly session so voters statewide can decide by referendum on November 2, 2010, if the property tax caps are included in the Indiana Constitution. If the referendum passes, the property tax caps will become a permanent part of the Indiana Constitution where they cannot be changed by the General Assembly or court challenge.
3. Farmers will be helped.
The 2008 property tax reform program is included House Bill 1001 and the constitutional amendment in the identical Senate Joint Resolution 1 and House Joint Resolution 1. The SJR 1 and HJR 1 constitutional amendment would make the 1% - 2% - 3% property tax caps permanent AND protect property tax deductions and credits from constitutional challenge.
Farmers have been ill-served by the Indiana Farm Bureau opposition to SJR 1 and HJR 1 because the 2008 property tax reform program helps farmers in the seven ways listed next.
(1) Like other homesteads, farm homes and the acre of land they sit on have their property tax cap lowered to 1% of their fair market value from 2%.
(2) Because farm land uses less of the municipal services normally paid for by property taxes, the cap for farm land is lowered to 2% from 3%.
(3) The remainder of farm business property taxes are capped at 3%, thereby creating a predictable maximum property tax burden. Average farm business property taxes will continue to be well below the 3% cap for the foreseeable future because the 2008 property tax reform program does not allow any property tax revenue shortfalls resulting from property tax caps to be shifted to taxpayer classes that have not reached their cap level.
(4) The 2005 agreement with the farm community continues where an assessment mechanism for farm land is implemented that, instead of using the fair market value required of all other real property owners, uses a market value in use approach based on changes in cash rent, yields, production costs, market prices, and interest rates. Starting with the Pay 2008 property tax year, farm land assessment calculations are based on a rolling six-year average calculated by dividing the net income of each acre by the appropriate capitalization rate. For example, the change in the farm land assessed value for the Pay 2010 property tax year was the result of the removal of the 2000 data and the addition of the 2006 data. The Pay 2007 farm land assessed value was arbitrarily frozen by the General Assembly at $880 per acre, while the subsequent calculated assessed values are $1,140 for Pay 2008, $1,200 for Pay 2009, and $1,250 for Pay 2010. An acre of farm land typically appraises at a fair market value of $4,200, and an acre of farm land in Hamilton County sells for up to $40,000.
(5) Like other Indiana businesses, Indiana farmers will continue to benefit from an accelerated depreciation schedule where farm equipment is fully depreciated within five years to 30 percent of its cost.
(6) Farmers will continue to benefit from sales tax exemptions on the sale of goods directly used in farming and on utility sales to a person for use in agriculture.
(7) The following costs are removed from local property taxes and transferred to the state: school general fund costs, child welfare levies, costs of juvenile incarceration in state facilities, state fair and forestry levies, hospital care for the indigent, pre-school special education levies, costs of certain police and fire pensions.
The importance of the 2008 property tax reform program to farmers is emphasized by comparing the increase in the value of farm land to the increase in the net property tax on agricultural business real property (which includes farm land). Farm land assessed value increased 36.4 percent from $880 per acre in 2007 to $1,200 in 2009. However, according to the December 1, 2009, Property Tax Impact Report from the Legislative Services Agency, the 2009 net property tax of $344.4 million on agricultural business real property was only 10.5 percent more than the 2007 net property tax of $311.7 million. The net property tax on agricultural business real property did not increase at the rate of the farm land assessed value increase because of the costs removed from the 2009 property tax bill by the 2008 property tax reform program.
In particular, the permanent property tax caps in SJR 1 and HJR 1 are important to the Hoosier farmer. Under the market value in use assessment mechanism with a 2% cap, farmers' property taxes will average 40 percent lower than if their farm lands were assessed at the fair market value and capped at 1%.
The key to any additional property tax relief for farmers depends on the possibility of credits or deductions on the assessed value of farm land. SJR 1 and HJR 1 make such credits and deductions immune to constitutional challenge. Farmers need to tell their Indiana Farm Bureau leaders to change their position of senseless obstruction and support SJR 1 and HJR 1.
The American taxpayer has been generous to farmers with various subsidies. Hoosier farmers should not begrudge the protection given to other Hoosier working families by the constitutional amendment in SJR 1 and HJR 1. Farmers are helped by the 2008 property tax reform program and should accordingly support SJR 1 and HJR 1.
4. There will be a more fair and affordable working family tax burden.
There are those who point out that the current property tax scheme, of which constitutional property tax caps are a part, will result in some Hoosiers paying more in statewide sales tax and local income tax increases than they receive in property tax relief. For those attuned to political reality, the proper response is "So what?" The terrible tax genie is out of the bottle – no informed citizen can envision a realistic circumstance where the statewide sales tax increase will be rescinded. If local income taxes go up to replace property taxes or replace the revenue lost to property tax caps, the tax burden is properly shifted away from property taxes to income taxes – from a tax NOT based on the ability to pay to a tax that IS based on the ability to pay.
Constitutional property tax caps are a type of "insurance policy" that protects working families from the possible future excesses of local government. Many local government has been taken over by developer-first interests where tax-increasing TIFs, nonsensical municipal annexations, and so-called development initiatives funded by taxpayers are forcing property tax burden ever higher. If push comes to shove, folks can change their buying habits to lessen their sales tax burden and use the property tax caps in SJR 1 to protect their home from the Taxpayer Unfriendly actions of local elected officials.
It is true that some municipalities in 17 counties may need to impose a local option income tax to maintain essential services. The caps cannot reasonably be expected to reduce the spending of some local governments by more than five percent. However, the HJR 1 and SJR 1 caps will make the property tax burden more predictable and the overall tax burden more fair and affordable. Fewer Hoosiers will have to choose between nutritious meals, needed medications, and keeping their home. Many working families may be one job loss, one on-the-job injury, or one illness away from needing permanently capped property taxes.
5. Homeowner property taxes will not leap up.
Some HJR 1 and SJR 1 opponents erroneously claim that the constitutional caps are useless because property tax relief depends on poorly controlled property tax assessments. Future homeowner reassessments will NOT continue to increase at the rate of recent years because ANNUAL market value trending will take the place of reassessments that covered several years at a time. In spite of currently declining home values, homeowner property tax assessments will likely CREEP UP over time, but these modest assessment increases BY THEMSELVES are NOT expected to cause homeowner property taxes to LEAP UP. Indeed, SJR 1 will KEEP homeowner property taxes from leaping up. Of course, it cannot be denied that effective legislative action to improve the assessment process, limit annual assessment increases, and establish a more sensible homestead definition would be MOST welcome.
6. Businesses will be helped.
SJR 1 is good for business. The property tax cap for all residential rentals, apartments, mobile home land, and long term care facilities is lowered to 2% of their value. The existing business property tax cap of 3% will never be increased, thereby enabling businesses to accurately predict their property taxes so they do not become an unaffordable burden.
7. Property tax revenue shortfalls resulting from property tax caps cannot be shifted to taxpayer classes that have not reached their cap level.
The property tax increase of a taxpayer who has not reached its cap threshold is limited by the 6-year rolling average growth in non-farm income.
8. Information is available to predict the effects of property tax caps.
The state's non-partisan Legislative Services Agency has computed the effects of caps on all Indiana taxing units.
9. The effect of property tax caps on K-12 school spending is manageable.
Of the 293 K-12 Indiana public school systems, 230 school systems will experience a 2010 property tax caps revenue decline that is less than 0.6% of their 2008 grand total expenditures. Fifty school systems will experience a 0.6% through 1.0% decline, while only thirteen school systems will experience a decline that is more than 1.0%. NO school system will have a 2010 property tax caps revenue decline that is more than 3.0% of its 2008 grand total expenditures.
10. Property tax caps will have NO significant impact on essential service delivery by the great majority of Indiana's cities and towns.
The great majority of Indiana's 566 cities and towns - 486 or 85.9% -will have their budgeted funds that include property tax levies impacted 5.0% or less by the 2010 caps. Of Indiana's 92 counties, 17 counties MAY need to consider a local option income tax in lieu of finding less expensive ways to maintain essential municipal services.
11. The Distressed Unit Appeals Board will not have unlimited ability to increase property taxes.
The Distressed Unit Appeals Board is a ticking property tax bomb. The bureaucrat and single interest dominated Appeals Board has the power to increase the property taxes of a distressed unit beyond the legislative 1% - 2% - 3% property tax caps. The HJR 1 and SJR 1 constitutional caps will make unconstitutional any Appeals Board decision that increases a political subdivision's property tax beyond the promised cap levels. Without SJR 1, there is no limit as to how much the Appeals Board can ultimately increase property taxes.
12. The property tax caps will be able to withstand legal challenge.
Last year’s legislative caps are blatantly unconstitutional without HJR 1 and SJR 1. The constitutional property tax caps must be passed to keep the deep-pocketed single interest groups from having the legislative caps eliminated by the courts.
13. The referendum process can be used to fund essential school and municipal services.
If local taxpayers are concerned about the effects of property tax caps on their local school system, current law allows them to approve by referendum funding and capital project increases that are not subject to the caps. Other government units can likewise have their capital projects approved by referendum.
14. Constitutional caps are a positive development for those who want to completely eliminate property taxes.
The HJR 1 and SJR 1 constitutional caps are a giant step in the right direction for those who favor complete property tax elimination by giving impetus to elimination efforts. For example, the Jeff Thompson Property Tax Replacement Plan includes a variable Property Tax Replacement LOIT that replaces the property tax revenue from all real property wholly owned by individuals residing within a local taxing area. Property taxes on real property can be replaced for all homeowners, many small businesses, and most farms within a local taxing area.
15. The homeowner caps for Lake and St. Joseph counties will eventually be 1% of assessed value.
We must not let the pursuit of perfection be the enemy of what is good. Some disingenuously assert that HJR 1 and SJR 1 should be revised because Lake and St. Joseph counties will start with different caps. Instead of 1%, the homeowner caps for Lake and St. Joseph counties will effectively be 1.88% and 1.52% respectively until 2020. Even though the beginning homeowner caps are more in Lake and St. Joseph counties, these caps will result in a 2010 property tax reduction of 36% for the typical Lake County working family and a 34% reduction for the typical St. Joseph County working family. If one word in HJR 1 and SJR 1 is changed, the constitution amendment process would have to start all over. Jeopardizing permanent property tax relief is not worth any effort to make HJR 1 and SJR 1 more perfect.
16. Property taxes can be controlled below the cap levels.
The HJR 1 and SJR 1 caps do NOT set farm land property taxes at twice the homestead level and business property taxes at three times the homestead level. The caps merely limit maximum property tax burden.
17. Indiana is NOT like California.
HJR 1 and SJR 1 opponents are trying to make the case that Proposition 13, which passed on June 6, 1978, is somehow responsible for the current budget deficit woes of California’s government units. There is research on all sides of Proposition 13 where you can find strong support both for and against constitutional property tax caps. The fact of the matter is that Indiana is not at all like California – California has sustained government overspending by relying on overly-optimistic revenue projections, while Indiana’s government units have done a pretty good job of adjusting and living within their revenue means. It is nonsense to look at California’s budget woes as a reason to oppose HJR 1 and SJR 1.
18. The protection offered by property tax caps is so important that the fate of constitutional caps should be decided by all the voters.
Representative John Day expressed an enlightened position on HJR 1 and SJR 1 during his 2008 reelection campaign. On the Indianapolis Star campaign website, Representative Day stated "While I have some doubts about whether the caps should be placed in our Constitution, the question is important enough that all the voters should have a voice on this issue." It is hoped that all state legislators appreciate that if the collective wisdom of the voters is sufficient for their election, it is also sufficient to decide the fate of constitutional property tax caps by statewide referendum on November 2, 2010.
From Watchdog Indiana
Posted by Team Hammond at Thursday, January 07, 2010
Blunt Proof of the Feasibility to Permanently Abolish Property Tax
Melyssa Donaghy 317-938-8913
Max Katz 765-409-6669
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.