A Citizen's Guide to Indiana

Masson's Blog

Morning round up

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I don’t feel an in-depth post coming on, so I’ll just give you some links I found to be of interest:

In an article by Sylvia Smith, the United States House has passed a bill that extends Medicare and expands health care coverage for children. Mike Pence is against it. (Read the rest for details — my knowledge of Medicare and federal coverage is too limited for me to be confident in my summaries.)

Amanda Iacone has an article about Allen County’s preference to have discretion on tax relief distributions at the local level. “Gov. Mitch Daniels has suggested a circuit-breaker approach to doling out the $300 million. That approach would benefit home owners with high-value homes. Beth Garber, the county’s lobbyist, told county officials that the governor’s plan could give the bulk of Allen County’s property tax relief portion to Aboite Township residents and likely no one else.”

The Evansville Courier Press has an editorial on how the federal debt is the Democrats’ problem now. When Bush took office, the national debt was $5.6 trillion and declining. Now, thanks to steep tax cuts and profligate spending, the national debt is $9 trillion and rising.

Greg Goode will seek the Republican nomination to challenge Brad Ellsworth in Indiana’s Eighth Congressional District.

A gunslinging penguin hacked the Delaware County website.

An inmate from Anderson escaped from the Westville Correctional Facility.

Why Property Taxes are going up

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Why are property taxes going up? Once again, Larry DeBoer, everybody’s favorite economist, has the answers.


Step One: For decades prior to 1998, Indiana had given homeowners a tax break by under-assessing houses relative to business property. The Town of St. John challenged this practice, and the Supreme Court required assessments based on market value.


Step Two: In 2002-03, reassessment was based on market value and tax bills on older homes jumped. The General Assembly provided about a billion dollars in property tax relief to ease the pain.

Step Three: The General Assembly found this level of property tax subsidy unsustainable for the State budget and decided to cap it. According to Prof. DeBoer, the cap accounts for about 4% of the recent 24% increase.

Step Four: Part of the 2002 tax reform with the huge property tax subsidy was elimination of the inventory tax. The last 51 counties eliminated their inventory taxes this year. (Other counties had done so in prior years.) The inventory tax shifted to other taxpayers and hit particularly hard in places, such as Indianapolis, with a lot of inventories. On average, the inventory tax reduction accounts for another 4%.


Step Five: Trending. Trending requires assessors to keep up with assessed value. In the past few years, assessed values were to be based on what a property was worth in 1999. This year, residential property values were to play catch up by going from 1999 levels to 2005 levels. Business property values were already subject to trending and, therefore, the changes in assessed value for business property values were not as dramatic. In Marion County and some others, however, business assessments were not trended. According to Prof. DeBoer, trending accounted for about 10% of the 24% statewide increase.


Step Six: Rising local tax collections account for about 6% statewide. Places with big government construction projects have higher increases and those without tend to have lower increases.

Homeowner tax bills are increasing mostly because of tax shifts, from businesses to homeowners, and from the state budget to local taxpayers. In most places, big homeowner tax hikes are not the result of large increases in tax collections. Big increases in government spending are not the main problem.
. . .
Property assessment is the way we divide up the cost of local government among taxpayers. Market-value assessment says that homeowners should pay more than they did under our old system. Homeowners don’t think that’s fair.

Perhaps it’s time to step back from the year-to-year tax crises and ask ourselves, “What is a fair way to divide up tax payments?” Perhaps that’s one topic the governor’s new commission will take up. If so, the question will be, “Can we agree on what’s fair?”

(Emphasis added).

[tags]property taxes[/tags]

World of Hurt

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Governor Daniels’ act of freezing Marion County’s tax levy at last year’s rate (anyone know where he got *that* authority?) has left Marion County $52 million short. Faced with similar prospects in Delaware County, Muncie Deputy mayor Phyllis Amburn said:

“If [taxes are left at the 2006 level], we’re in a world of hurt,” Deputy Mayor Phyllis Amburn said. “We’ll be short on the 2007 budget. That includes contractual wage increases and inflation in utilities and goods.”

Soon to appear in the Scientific Journal “Duh”

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The Associated Press has an article entitled “Why have sex? Young women and men agree on reasons” discussing a recent study. Leading the reasons: physical pleasure and “it feels good”. You don’t say. The angle of the story is that the emphasis on how it feels refutes stereotypes about how women are having sex for love while men are doing it because of how it feels.

Appearing last on women’s reasons: “I wanted to give someone else a sexually transmitted disease.” The article doesn’t indicate whether this reason didn’t appear on the men’s reasons or they (shudder) ranked it higher.

House Republicans have a plan

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The Indiana House Republicans are taking advantage of their minority status by putting forth a plan on property tax relief. You’ll note that the Senate Republicans have not yet followed suit — a minority faction in a chamber simply has a lot more freedom of movement in this kind of situation; they can’t be blamed when nothing actually happens.

The House Republicans want to keep in place the plan for the State to spend $300 million on property tax relief. That money is expected to come from the sale of slot machine licenses for Indiana’s two horse racing tracks. In addition, the House Republicans propose spending an additional $200 million from the State’s surplus on property tax relief. This would apparently wipe out the State’s surplus. The State would also pay for increases in child welfare levies this year. That would free up about $50 million on the local level.

Senator Kenley, probably the biggest mover and shaker in the General Assembly on the property tax issue had this to say about a special session:

“The public wants this thing to be permanently corrected, and I think if you go into special session, expectations are that will happen,” Kenley said. “I think it’s clear that we have a ways to go before we can make permanent changes to alleviate this property-tax problem.”

With the House Republicans proposing that the State pay for more government obligations, it seems like a good place to repost a comment Brenda left that nicely describes the State/Local interaction on the property tax issue:

Prior to 2007:

State: Ok, counties, you must do (and pay for) these 5 things

Counties: But, but, that will cost us 10 pennies

State: Ok, not totally fair for your taxpayers, how about we kick in 5 pennies – we’ll call it an exemption

Counties: ok

Taxpayers: ok

———–

Cut to 2007

State: oh, hey, we don’t have very much money. We’re only going to kick in 2 pennies this year.

Counties: but, but… we still have to do those 5 things, right? And they still cost us 10 pennies.

State: Whoo hoo, look at us… we have an extra 3 pennies! Aren’t we being smart with taxpayer money!!

Taxpayers: Uh, wait a second…

State: What? You taxpayers need to talk to your counties about how much money they’re spending! (We’re running a surplus, we’re running a surplus!)

Counties: Uh, wait a second…

Edwards leads in Iowa

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I only have half an eye on the national stories, so I don’t know how well they’re covering this stuff. MyDD does an excellent job of tracking national polls. Today, the site posted an entry entitled New Iowa Poll Puts Edwards in the Lead. Nationally, I guess Edwards is running third behind Clinton and Obama.

Personally, at this point, I favor Edwards as a candidate. More than Clinton and Obama, I think he sees a rock solid middle class as critical to the health of our democracy. I don’t think Clinton or Obama dismiss the need for a strong middle class; I just think it’s lower on their list of priorities.

I was also impressed when he had the courage to point out that “War on Terror” is a slogan, particularly as implemented by the Bush administration. Let’s be clear since folks who hear this become deliberately obtuse since it suits their cause. There are people and groups who wish to do us harm. These people and groups will use terror as a tactic if given the opportunity. These people and groups should be stopped. To stop them, we need to identify them and take away their means and will to cause us harm. War, a term most commonly used to indicate a state of hostility between two states, is a poor metaphor for our efforts against these malicious people and groups. Terror is not our enemy. Rather, the people who want to harm us, whether they use terror or not, are our enemies. So, “War on Terror” is a poor description of what our efforts ought to be. And, as used by the Bush administration, “War on Terror” seems to mean – “Gimme! And shut up about it!”

Folks who don’t particularly like Mr. Edwards should take heart. I haven’t backed a winner since 1988 when I favored the Bush/Quayle ticket.

Pool a little cold for Fred Thompson

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The Republicans don’t seem very enamored of their official Presidential candidates. So, it seemed as if maybe actor Fred Thompson might be their man on a white horse. Thompson was testing the waters before throwing his hat in, but they seem a little chilly at this point. His fund raising was a bit lackluster for his first month – raising $3 million instead of the hoped for $5 million.

There have also apparently been some internal problems with his campaign. None of this knocks him out, but it certainly diminishes the aura of invincibility the GOP tends to like to see in its candidates.

Tax relief

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The legislative study committee reviewing the property tax situation received some advice from Gov. Daniels yesterday. Ryan Kitchell, director of the governor’s Office of Management and Budget pushed the Governor’s plan to target rebates at those whose property taxes exceed 1.1% of their property’s assessed value.

As a policy matter, that makes as much sense as anything else, I guess. But, something is really wrong when we’re still debating this in between sessions. The legislature is responsible for making tax policy. If they gave the Governor the discretion to dole out the rebate checks willy-nilly, that was irresponsible. If they didn’t give him the authority, then why even have this discussion? The legislature chose its tax policy earlier this year. Stick with it until the next session and revise it then, if necessary. I don’t see any unforeseen emergency here. What I see is certain lawmakers getting nervous as the chickens come home to roost on policies they chose.

In my mind, special sessions are appropriate for resolving unfinished business (say, passing a budget when no agreement was reached during regular sessions) or for addressing situations that could not be foreseen during the regular session. They are not appropriate just so lawmakers can have a chance to change their minds. “No take backs” as we used to say when I was a kid. Making laws fluid – changeable at any time creates uncertainty. I don’t think lawmakers want to set a precedent to the effect that laws can be revisited at any time of the year. I think the short term property tax pain is preferable to the long term uncertainty of an ever-changing law book.

Disability Delays

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The Indianapolis Star has an article entitled Disability delays lead to personal havoc. As it turns out, these disability delays increase the volume on my collections business, so I’ll keep this short. Some of the folks I run into who are claiming disability look healthy enough to work to me — but I’m not a doctor, so I couldn’t say for sure. Others are clearly in bad shape. As far as I can tell, both kinds of people are waiting in the same line. The Indianapolis Social Security office has the 4th longest average wait in the nation for a hearing on disability claims – over 2 years. In the meantime, the claimants have to fend for themselves and look elsewhere for help. The long waits on their federal claims results in an increased burden on state relief programs.

Hoosier Pass

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I’m in the process of scanning in pictures from my pre-digital camera days. The one of Hoosier Pass isn’t necessarily the most exciting, but topically the most relevant to this blog. I’ll probably be scattering pictures from this project into the blog, but if for some reason you want to see the rest, they’re available here.

Hoosier Pass