[r53] Cherry Chat: Some Thoughts on the Property Tax Issue (8/7/2007)

Tuesday, August 7, 2007

Start Date: 8/7/2007 All Day
End Date: 8/7/2007

Unless you have been completely removed from newspapers, television, radio, and your neighbors in the past few months, you know that property taxes are on every Hoosier's mind. 

Many farmers and business owners have been complaining about property tax increases and injustice in the system for a long time.  Now more homeowners are starting to see the same problem and are calling for a solution.  Thankfully, our community has not been hit as hard as other areas across the state.  For that, I applaud our county tax assessors who have done a great job assessing property in a fair and proper manner. 

However, the issue is still at hand and a permanent solution is nowhere in sight.  One of the temporary solutions brought to the table by lawmakers was to legalize slot machines at the state's two race tracks, Indiana Downs in Shelbyville and Hoosier Park in Anderson, and reserve the resulting revenue for property tax relief.  Although the legislation was passed by the General Assembly, I am leery about this idea because gaming profits are not a dependable or consistent source of revenue for property tax relief.  What if there is a decrease in slot machine usage in the next few years?  How will we replace that lost revenue and what will Hoosier homeowners do without this particular form of property tax relief?  These are some of the questions that must be taken into consideration when talking about a solution to the property tax problem.

Recently, my House Republican colleagues and I proposed a plan to provide an additional $200 million in immediate property tax relief for Hoosier homeowners.  This is a great short-term solution and it is the best we can do right now to provide temporary relief while working on restructuring the entire system.  The five-point plan to grant immediate relief to the hardest hit residential taxpayers would:  (1) convert the rebate check to a credit on the fall 2007 installment of taxes; (2) extend the deadline for filing of the homestead credit for 2007 to September 15 of this year; (3) grant local counties the flexibility to apply the credit to those individuals and communities hardest hit by recent tax increases; (4) freeze child welfare levies in 2007, with the state picking up all levy increases for 2007 and following years; and (5) appropriate an additional $100 million of state funds toward immediate residential property tax relief.  Items 1, 4, and 5 would be distributed as a credit on fall 2007 tax bills.  Although this plan would result in immediate property tax relief, I remain fully committed to finding a long-term solution and the only way we will be able to accomplish that is to reform the property tax system and shift our reliance away from property taxes.

One of the problems with property taxes is that citizens need and expect services at the local level.  We all want our children and grandchildren to attend good schools, we want to be able to call the fire department in an emergency, and we expect law enforcement officials to keep us safe.  However, property taxes currently pay for all of these services.  In order to reduce our reliance on property taxes, we need to find another source of revenue to replace them. 

Tweaking civil government is not reducing property taxes.  We need to completely reform the entire system and provide local governments with alternative funding for the services they provide.  School construction accounts for the majority of property tax growth in the state.  We need to remove the burden of school funding from property taxes.  We also need to control spending in order to prevent property taxes from escalating further. 

I have always been adamant about Indiana's need to move away from our reliance on property taxes.  There are many injustices in the use of property taxes as a funding source for local government.  The most glaring injustice is that the services provided by property taxes have nothing to do with "property."  In addition, property taxes tax debt rather than wealth, especially in the case of homeowners with mortgages.  Furthermore, property taxes are penalizing Hoosiers who own their homes and put money into maintaining their homes.

Permanent reform of our tax system and the possible repeal of property taxes must be on the agenda for the next legislative session.  It is my hope that we will be able to create a fair taxing solution that will completely reform the current property tax system in the next year.

Contact me with any questions, comments, or concerns.  Send letters to: State Rep. Bob Cherry, 200 W. Washington St., Room 401, Indianapolis, IN 46204. E-mail: H53@in.gov or call toll-free: 1-800-382-9841.