Pharos-Tribune

Opinion

July 9, 2007

A tax crisis, a rebate scheme and a warning

ANGOLA — First of all, to reveal my own personal biases, I just received my spring property tax bill (two months late) and the taxes on my home across the street from Broad Ripple Park in Indianapolis went from $1,500 a year to $3,400. That’s a 126 percent increase.

As you can imagine, when shooting off artillery shells over the Fourth of July, I was not happy, but my wife made me promise to stay away from any legislator or governor and their homes with the now legal explosives.

My e-mail is literally filling up with messages from friends: One in the Butler-Tarkington neighborhood reports an increase from $2,600 a year to $7,423 (185.5 percent); another from $488 to $1,757 (260 percent). And these folks had already seen huge increases since the last property tax reforms of 2002. One friend living near Butler University has seen his property taxes quadruple since he bought his home in 2001.

These are folks facing a big income tax increase, along with $3 a gallon gas, higher grocery bills, skyrocketing natural gas, college tuition and health insurance. The big squeeze has now firmly gripped the middle class.

All are talking about selling their homes and moving.

The pathetic thing about this situation is that Indianapolis has powerful people who should be looking out for them. Gov. Mitch Daniels is from here. So are House Ways & Means Chairman Bill Crawford and House Minority Leader Brian Bosma.

This is not, however, just an Indianapolis problem. There will be pockets across the state where folks will be facing double and triple digit increases.

Last March, State Sen. Luke Kenley offered up an ambitious property tax reform package. The state would have assumed education operating costs as well as those of juvenile detention, giving property owners a 60-percent reduction along with corresponding shifts to income and sales taxes. But in the final week of the session, a Legislative Services Agency report predicted an average 24 percent increase in property taxes statewide.

As I wrote in May, to most legislators, the sky was falling. They scuttled the long view and instead decided to dedicate $550 million in a two-year spasm of property tax rebate that will bring the average increase down to 8 percent. When the inventory tax was scuttled in 2002, it essentially shifted much of the burden from businesses to home owners.

The average rebate check will amount to less than $300 — little solace for folks like myself facing a $2,000 increase.

While the Kenley plan had merits, he was in no position to acquire a bully pulpit and bring public opinion into the matter. The fact is that governors lead and legislators follow. Gov. Daniels chose not to engage on this issue and now families across the state are facing the kind of dilemma that can damage Indiana for decades. The last thing the troubled Butler-Tarkington neighborhood — the very place where Gov. Daniels kicked off his two campaigns for governor — needs is more good families fleeing.

House Speaker B. Patrick Bauer spoke glowingly about the rebate scheme.

“I am particularly pleased that we were able to provide $550 million in property tax relief over the next two years and begin the process of creating lasting property tax reform for years to come,” Bauer said. “This marks a return to past bipartisan legislative commitments to protect the interests of families and owners of homes, businesses and farms.”

Say what?

Bauer continued: “Indiana House Democrats have been committed to property tax relief for years. Mailing a rebate check to property owners is the only responsible way to get relief to them in 2007.”

The only responsible way?

That is a joke. It has thrown beleaguered counties already late with spring assessments into the complex mode of how to get this rebate sent out. Presumably there will be a note with the rebate lauding the General Assembly for its foresight and vision.

The key legislator behind this rebate scheme was then-State Rep. Bob Kuzman of Crown Point. He resigned recently to take a job as a high-paid lobbyist for the Ice Miller law firm in Indianapolis. Other House Democrats are fleeing this sinking ship like rats. State Rep. Duane Cheney will resign. State Rep. Jerry Denbo recently filed for a French Lick Town Council seat and may follow suit.

Late last month, Indianapolis Mayor Bart Peterson called for a special session to deal with this tax crisis. Daniels described the request as one “out of the blue” but said he would consider a session if enough legislators agreed.

Bauer and Crawford — both Democrats like Peterson — have been silent.

Peterson is on the ballot in 2007. Daniels, Bauer, Bosma, Kenley and, possibly, Denbo are on the ballot in 2008. About 400 people showed up on the Fourth of July outside the Governor’s Mansion to protest. It was so big, police closed down Meridian Street. Their essential message was this: Throw all the incumbents out.

The big question today is whether those who ran the fool’s errand of the rebate scheme will be stupid enough to dismiss the pain of the people.

Brian Howey, a Peru native, is the publisher of The Howey Political Report. He can be reached at www.howeypolitics.com

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