Lesley Stedman Weidenbener had an article on the House Ways & Means Committee hearing on The Daniels Plan to restructure Indiana’s tax system. Apparently, the “eliminate property tax” (and jack up other taxes) crowd was out in force. Realtors and owners of a lot of property were, unsurprisingly, very interested in the idea of getting rid of property taxes.
To accomplish a property tax elimination, Indiana would have to “the state would need to increase the state sales tax to 13.2 percent from 6 percent or raise the state income tax to 9 percent from 3.4 percent to pay for an elimination of the property tax” or some combination thereof.
But Jesse Ballew, who owns a substantial number of properties in Clark and Floyd counties, told lawmakers that the sales and income tax increases could be substantially lower if the state also restricted local governments to spending increases of no more than the rate of inflation.
“That’s no different than putting a cap on spending on your home. If you spend more than you make, eventually you’re going to have a problem,” he said.
Oh really? Local government spending is no different than home spending? Homes don’t traditionally, for example, have the State passing more criminal laws requiring them to incarcerate more people, State prosecutors and State courts ordering the incarceration, and federal courts mandating space and health care requirements for the inmates once they are incarcerated. Local government can’t just “do without” in quite the same way as home budgets. I’m sure your local county council member would be more than happy to “do without” a heart transplant surgery for an inmate or some other mandated expense.
Apples and oranges – and when you hear folks start comparing local government budgets to home budgets, dollars-to-donuts says your infrastructure is about to start crumbling.