Former Lafayette Mayor Jim Riehle has passed away. The Lafayette Journal & Courier has a nice write up. I didn’t live in Lafayette while he was mayor, but he served from 1971 to 1995, and it’s my understanding that he had a profound impact on the city. It seems to me that the city is in pretty good shape today, and I suspect that is in no small part due to his leadership.

The Fort Wayne Journal Gazette main page is too annoying to visit these days. I log on and immediately get choppy advertising audio piping out of my computer speakers. It’s like some kind of craptacular MySpace page. And that’s unfortunate since the Journal Gazette has traditionally done some of Indiana’s best political reporting (Thanks Niki Kelly!) I still get some of their stories through my RSS subscriptions, but I won’t be going to their site looking for stories until they do something about that push audio advertising strategy.

Daniel Lee has a story in the Indy Star citing industry experts who expect health insurance premiums to rise 10 to 15% locally this year. Forget property tax increases, this is the increase that should have people protesting in the streets. You can move to a cheaper property. Getting into a less expensive body is more problematic, and the health insurance increases have been going on for a long time now. Maybe it’s a frog in the pan phenomenon. The property tax increases have been mostly all at once. The health insurance increases have been more gradual. The article cites smoking, obesity, and the hospital boom in central Indiana for the local increases. I’m getting to the point where I have the same reaction to health insurance execs citing obesity for premium increases as I do when oil execs cite pipeline disturbances for price increases — there is a chance they’re telling the truth, but I can’t escape the nagging suspicion that there is a top executive out there angling for a way to add a couple million to his take home pay. (Think of the property tax outrage if Governor Daniels or Mayor Peterson had a 7 or 8 digit salary and was contemplating raising property taxes by 10% per year.)

For employment based health plans, the article also points to a trend toward looking into employee lifestyles – smoking, eating, exercise habits; and charging more to those who choose poorly. I have mixed feelings on this trend. It seems to make a fair amount of sense for those actions one can truly choose yeah or nay on. But how about when the insurers start charging you extra based on your genetic makeup? And this assumes that the insurer is going to administer these categories fairly. I can see paper pushers in the insurance bureaucracy getting incentives for “mistakenly” putting more folks into the higher risk categories.

I guess a fair amount of my negativity comes from the lack of transparency of the health insurance industry and my general lack of trust in the motives of those who run it. Under normal circumstances, you don’t have to trust the motives of an actor in a market situation — the market tends to correct those who are merely out to screw you. But the health insurance industry is different in that it is so opaque that it is difficult to make meaningful comparisons. Furthermore, given that health care is often times literally a matter of life and death, you don’t always have the option of simply walking away from the market as is the case with other products. Like one person interviewed for Mr. Lee’s article said, “the system is broken.”

[tags]health care[/tags]

My wife has first dibs on the new Harry Potter book, so I haven’t read it, but it’s in the house. It occurs to me that, as Voldemort has risen and Harry’s world has gone to hell, so has ours. Harry Potter and the Sorcerer’s Stone was published in June 1997. In the book, Harry is 11, suffering at the hands of his foster family, the Dursleys, and gets rescued as he gets the opportunity to go to Hogwarts. Subsequently there is a minor disturbance at Hogwarts as Voldemort tries to get a stone that conveys immortality. Back then, things were going pretty well for us too, I think. Bill Clinton had just started his second term, OJ got nailed by the Goldmans for a big civil judgment, the Dow Jones Industrial Average was hitting new highs, Dolly had been successfully cloned, the Heaven’s Gate freaks committed mass suicide because of Hale Bopp, Timothy McVeigh was convicted, we had things so good, Google registered its domain name, and it made sense that the death of Princess Diana was the most important thing in the world. (The Cleveland Indians lost to the Marlins in Game 7 of the World Series, but that was a personal tragedy, not world wide.)

As Harry gets older and time progresses, his world gets progressively darker. We’ve seen a similar progression since 1997 in our world. In 1998, Bill Clinton is impeached, and George Bush executes Karla Faye Tucker. Matthew Shepherd is tortured and killed in Wyoming for being gay.

In 1999, Sirius Black escaped from Azkhaban and our year (in the Midwest) came in with a purpose — big snows and subzero temperatures; the Columbine Massacres followed in April. Texas Governor Bush announced he will seek the Presidency. Y2k turns out to be not that big of deal.

In 2000, we see one of the Hogwarts’ students die at the hand of Voldemort after the Goblet of Fire competition, and the Dark Lord restored fully to the living. Meanwhile, back in the real world, we saw the Supreme Court stop the vote count in Florida, leading to the selection of George W. Bush as President. Elian Gonzalez is seized from his relatives Miami home and returned to his Cuban father. Ehud Barak and Yasser Arafat attempt and fail to reach an agreement at Camp David. Ariel Sharon and several hundred Israeli police visit the Temple Mount, provoking a new Palestinian intifada.

Three long years go by. When 2003 rolls around, the Order of the Phoenix has reformed, and in the end Harry’s godfather, Sirius Black, is dead. Harry’s world has gotten positively grim. So, too had ours. The stock market took a sharp downturn, California was plagued by rolling blackouts caused by power companies gaming the system — Enron and others were gaming the system to drive up prices while the Federal Energy Regulatory Commission looked the other way and Dick Cheney blamed the situation on California’s environmental laws. Massive corruption took down companies like Enron and Arthur Andersen. Then, al Qaeda killed 3,000 Americans, destroyed the World Trade Center, and damaged the Pentagon. In response, we invaded Afghanistan, the government of which was harboring al Qaeda and refusing to bring them to justice. Anthrax was mailed to Congressional offices; the culprit never found. In 2003, inexplicably, we invaded Iraq on the pretext that its weapons of mass destruction posed a grave and gathering threat to the United States. As it turned out, there was no reason to stop the inspectors from doing their jobs; they were finding what there was to be found, which is to say, nothing. The Bush Administration had opened up an extra-judicial internment camp at Guantanamo Bay. In the name of temporary security, Americans had been asked to give up any number of liberties and entrust the executive branch with extraordinary powers. The budget had gone from something of a surplus to massive deficits and the national debt was increasing by leaps and bounds. George W. Bush landed on the USS Abraham Lincoln, declaring “Mission Accomplished.”

In 2005, the Half-Blood Prince was published. The book starts with the Death Eaters openly wreaking havoc in Britain. By the end, Albus Dumbledore, the most powerful good wizard is dead. In our own world, George W. Bush had been elected to the Presidency. (Like in Harry’s world, where he finally hooked up with Ginny Weasely, there was the occasional bright spot — Masson’s Blog premiered on November 15, 2004.) But, still, with the New England Patriots winning their second consecutive Super Bowl, things were fairly grim. A judge was murdered in Georgia, and Senator Cornyn suggested that “judicial activism” may have been the motive. Religious activists were especially active in attacking the judiciary. Justices Roberts and Alito are named to the US Supreme Court. The quagmire in Iraq continued unabated at a steep cost to American blood and treasure. Explosions rocked the London underground after a terrorist bombing. President Bush flew back to Washington from vacation in Texas to sign legislation to meddle in the private affairs of Terri Schiavo in an attempt to keep her husk on life support. Senate Majority Leader Dr. Bill Frist diagnosed her as having brain activity after watching a video tape. Bombings in Bali killed 26. And Hurricane Katrina destroyed New Orleans; governmental response was anemic due at least in part to crony appointments to FEMA.

Here we are in 2007. The political situation has gotten a little bit better. The economy seems to be getting fairly lively. I haven’t read the book, but presumably Harry will save the day, though not without considerable personal sacrifice. At the end of the book, I hope Harry’s world will be seeing the light at the end of the tunnel. Perhaps we can do the same here as well.

This is far off my normal subject matter, but this bit is just genius:

Mary Beth Schneider, writing for the Indianapolis Star, has an article on the Marion County Reassessment that highlights some more issues with the Governor’s order, apparently by fiat, that properties in Marion County be reassessed.

1. Who is going to pay for the reassessment? It’s the governor’s order, apparently. (He’ll get DLGF to implement an order in 10 days or more — the required public hearing on the issue being a mere formality.) The Marion County reassessment fund is depleted. So, we have State ordered local government spending — kind of how we got in this mess in the first place.

2. Mortgage companies may or may not honor the Governor’s unilateral order. The Star article quotes one homeowner who was told, without a new tax bill, she would have to send her mortgage company an escrow amount based on the most recent 2007 property tax bill.

3. Some taxpayers had bills that decreased. Are they now obligated to make higher payments?

4. The inventory tax that was eliminated this year was on the tax bills last year. Are businesses obligated to pay the bigger bill that included the inventory tax?

5. Will local governments have to default on their obligations? Because of the freeze, “cities, counties, townships, schools, libraries and other Marion County government units will be getting $132 million less than they were expecting.” Gov. Daniels did not freeze the obligations of local government, he merely froze the means with which local government can meet its obligations.

6. With the same assessment rules in place, will the reassessment result in different values? This one is probably easier to answer — if business properties are significantly undervalued, as the reports seem to indicate, those assessment values should rise (while residential assessments probably won’t change that much). The net result will be a higher total assessed value for the county, resulting in a lower tax rate. Businesses will pay more while residential property owners will probably pay less. I wonder what the Chamber of Commerce thinks of this move.

(H/t In The Agora) Here is a little timed name the Presidents quiz. I got them all in 3 minutes, 23 seconds. (I’d like to thank my Richmond High School AP U.S. History Teacher, Ed Johns, whose teaching style fairly burned many details of American history into my brain. He’d probably think my time was a bit slow given that I would be competing against all the rich kids at the prep schools out East when I took the AP test — nice “us” versus “them” motivational technique.) I also have a bit of a leg up in that my grandparents happened to live across the street from the old house of Rutherford B. Hayes, the most forgotten President.

The Governor has announced his intent to have the property values in Marion County reassessed. I haven’t found where the Governor himself has this power, but do see where the Department of Local Government Finance has such authority (thanks to a commenter over at Advance Indiana.) According to a DLGF press release:

Daniels decided to order the Marion County reassessment after receiving a recommendation from Department of Local Government Finance (DLGF) Commissioner Cheryl Musgrave. The DLGF and the state’s government efficiency group have been poring through parcel data for the county in recent days. Musgrave outlined findings that prompted her recommendation in a memo to the governor. For example, assessed value for nearly three-fourths (16,000 of 22,100) of commercial and industrial parcels in Marion County did not change at all over a six-year period.

The state will take charge of the commercial and industrial reassessment in Marion County using professional assessment assistance and instruct county officials to do the residential work. Marion County property taxpayers will receive bills with a new 2007 amount promptly after the reassessment is completed and tax rates certified, a process that is expected to take six to eight months.

To begin the formal process of initiating a Marion County reassessment, the DLGF has issued a resolution that calls for a public hearing in 10 days. Following the public hearing, DLGF will issue an order to reassess.

According to another DLGF press release, Cheryl Musgrave took office as Commissioner on July 16 and has held office for all of 2 days. And, it’s a little disturbing to me that the hearing is to be a mere formality. The process for DLGF to take charge of a reassessment is set forth in
IC 6-1.1-4-9:

Reassessment resolution of department of local government finance; hearing; reassessment order
Sec. 9. In order to maintain a just and equitable valuation of real property, the department of local government finance may adopt a resolution declaring its belief that it is necessary to reassess all or a portion of the real property located within this state. If the department of local government finance adopts a reassessment resolution and if either a township or a larger area is involved, the department shall hold a hearing concerning the necessity for the reassessment at the courthouse of the county in which the property is located. The department of local government finance shall give notice of the time and place of the hearing in the manner provided in section 10 of this chapter. After the hearing, or if the area involved is less than a township, after the adoption of the resolution of the department of local government finance, the department may order any reassessment it deems necessary. The order shall specify the time within which the reassessment must be completed and the date the reassessment will become effective.

Notice that the Department is supposed to conduct a hearing first and make its order second. The Governor has apparently made the decision for the DLGF. This is backward from the way IC 4-22-5-1 says things are supposed to run:

Sec. 1. Where under the provisions of any statute, the department of local government finance . . . is required to conduct a hearing, the commissioner [may appoint hearing officers, if done in writing]. In the discharge of their duties, the hearing officers shall have all the powers to investigate and to require evidence granted to the department[.] The department . . .may conduct any number of hearings contemporaneously through different hearing officers. At the conclusion of a hearing, the hearing officer shall make a written report thereof. After receipt of the report the department . . . may take further evidence or hold further hearings. The decisions of the department . . . shall be based upon the report, additional evidence, and records as the department . . . deems pertinent.

Odd that the Governor didn’t agonize over whether he had the authority to order reassessment without a prior hearing of the DLGF the way he agonized over whether he had the authority to take action on fuel taxes.

The reassessment of Marion County may not be a bad thing, but the process is important. This is a democratic government we’re running, warts and all. Laws mean things — even if the Governor chooses to ignore them, such as when he suspended the bar closing time because Daylight Saving Time made it inconvenient or when he intervened in opposition to St. Joseph County’s request to move to Central Time despite the law requiring him to support such a request.

Reading the Indianapolis Star today and yesterday, I got the impression of mass tax protests, sweeping the State. The Star told me that special sessions were routine. Some are using the opportunity to promote the idea of replacing property taxes with sales taxes. I get the idea that problems are substantially worse in Marion County than elsewhere and that some of the folks pushing hard on the sales tax are not just responding to this property tax crisis, but have been pushing the sales tax over other sorts of taxes for quite some time.

I’m just a small town lawyer, so what the heck do I know? But, I get a little edgy at the idea of panicked Marion County lawmakers joining forces with opportunistic sales tax promoters jumping into an impromptu special session to slap together wide-ranging property tax legislation. Makes me feel like checking my wallet every so often to make sure it’s still there.

Step one: Analyze the problem state wide to see how bad the problem is in, for example, counties that took advantage of the opportunity to adopt a county option income tax to offset the inventory taxes that were eliminated.

Step two: Take a breath, think it through.

Step three: Make changes in a regular session. This ensures the process is less arbitrary and reduces the pressure to do something just for the sake of doing something. Probably lawmakers should do something, but if they get into a special session and find that all of their alternatives are worse than the current situation, I’d hate to see them go ahead with one of those alternatives simply because they need to do anything.

Many will say “local government needs to spend less.” That’s a good idea. But, ask those who propose this as a solution to the current problem to identify which government services ought to be reduced or eliminated. Some will say that their property taxes impose too great a burden. And this may well be true. But ask them to identify those whose taxes should increase so that theirs might be reduced. Because these are your two options: 1) Cut or reduce specified government services; we need to know which ones. 2) Reduce the tax burden on one class of citizen and impose an additional tax burden on another class of citizen; we need to know who should gain and who should suffer.

[tags]property taxes[/tags]

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More gratuitous pics of my kids. This one is from a bunch my wife Amy took for her 2 year portraits. The rest of the set is here.