Lesley Stedman Weidenbener has a column in the Louisville Courier Journal which I think unduly minimizes the fault state legislators bear for the current property tax problems. She bemoans the ignorance of the electorate shown by a recent Chamber of Commerce poll. This is justified to some degree — folks don’t seem to know that property taxes get spent almost entirely at the local level. But, I think she is wrong where she seems to place most of the blame for the current property tax increases on local officials. She does this somewhat indirectly, by saying that she doesn’t absolve the state of all blame which seems to indicate she absolves them of most of the blame.
But, the fact is that increases in local spending accounts for only 6% of the 24% average increases. Ms. Wedenbener has this paragraph in her column:
I don’t mean to absolve the state of any role. After all, lawmakers have made decisions recently — including the elimination of the inventory tax and the creation of a floating cap on property tax relief payments — that have affected homeowners’ bills, too.
These are two of the three main causes of the recent property tax spike. As I’ve mentioned here before, the spike can be mostly explained by:
1. Caps on the Property Tax Replacement Credit and Homestead Credit — These were State actions that were done to allow the State to balance its own budget; in effect, the State balanced its budget on the backs of local government.
2. Elimination of the inventory tax — An action by the State that shifted the tax burden from inventory tax payers to property tax payers.
3. Trending — Part of the State’s implementation of a State court’s 1998 decision that the State’s method of taxation was unconstitutional.
The fact is that the General Assembly and the Governor (primarily through the Department of Local Government Finance) are heavily involved in micromanaging the taxing authority of local government and, consequently, bear most of the blame in the recent property tax increases.
So, Ms. Weidenbener is right when she says:
But no solution will likely work unless Hoosiers get a better understanding of the issues, which means everybody involved has a little educating to do.
I’m just happy she gave me an opportunity to do a little educating.
Speaking of Ms. Weidenbener, she has an excellent article on the subject of retirements in the General Assembly and their potential to shift the balance of power from Democrats to Republicans. There are apparently 5 Democrats who aren’t going to run for re-election and one Republican. The Republican, Matt Whetstone, comes from an area that voted about 70% Republican and, therefore, his seat isn’t likely to shift parties. Some of the Democratic retirements leave more vulnerable seats — particularly Dave Crooks seat in Daviess County and Joe Micon’s seat in Tippecanoe County. Also retiring are Jerry Denbo (probably – not yet formally announced) out of French Lick, and Bob Kuzman from French Lick. In addition, up in Portage, Duane Cheney resigned and, his replacement, Jack Clem, passed away recently.