We all have homework to do on property tax caps

The Indiana House and Senate have each passed resolutions that will create a November Constitutional referendum on the 1-2-3 property tax caps. At this point, I support the people’s right to make this decision. But I’m not sure it’s the right decision. All of us – particularly in the news media – have a lot of work ahead of us over the next 10 months to learn and convey as much as we can about the caps.

As a reporter, I’ve covered city and county government in Peru, Elkhart, Fort Wayne and Indianapolis. As an editor at the Elkhart Truth, I oversaw the coverage of town governments in places like Middlebury, Nappanee and Wakarusa. During this time, I saw frugal public servants pinch pennies. One of these servants was Fort Wayne City Councilman David Long, who is now president pro tempore of the Indiana Senate. He supports the caps.

Places I didn’t cover were cities like East Chicago, which had a population of 32,000 in the 2000 Census and at one point had 1,000 municipal employees. With 16 layoffs this week, it’s down to 750 employees. I didn’t cover Kokomo; where some firefighters get seven weeks of paid vacation a year and lucrative benefits. I didn’t cover Goshen; where the city and Elkhart Township each bought expensive fire trucks that they park about a mile away from each other. And some of the small towns I’ve become acquainted with have 1,000 residents and you’ll see seven or eight police cruisers parked outside town hall a few blocks away from the county sheriff with even more cruisers.

So there are pockets of Indiana where local officials taxed and spent what they received versus deciding what they really needed. Oftentimes there was nary a thought to share resources with those nearby if they crossed an arbitrary line on the county map.

I also saw school corporations construct lavish buildings, build Olympic sized pools and adorn their football stadiums with artificial turf and big video screen scoreboards. These are the things that motivated Gov. Daniels to push for the caps. And he has an ulterior motive. He wants to collapse the layers and layers of municipal government. It isn’t just Republicans who are pushing this. When Indianapolis Mayor Bart Peterson sought to end townships in a city that also has county government, former Democratic congressman Andy Jacobs Jr. described government as “layers of ear wax.” It just built up over time.

So the whole exercise of re-evaluating how government has built up over the years is a good one. Businesses do this all the time. They have to become more efficient or they’ll go out of business.

And there has been movement on efficiency. Zionsville and two surrounding townships officially merged on Jan. 1. Voters in Greenwood and White River Township will vote on a merger referendum later this year. So will voters in Evansville and Vanderburgh County. Evansville Schools recently announced a cooperative with New Harmony and other neighboring school corporations. I’m not sure any of this would have happened without the caps.

Having said that, there is cause for concern. About 30 states have some sort of tax caps, but it’s hard to draw lessons from them. We know California is facing a financial crisis as well as many other states and, subsequently local governments and schools. We know anecdotally that many municipalities under caps then pass local option taxes and raise fees, so taxpayers still pay one way or another.

What is disturbing is there is little data available on which caps work well, and which don’t. Proponents of the caps as well as the news media must shed as much light on the caps experience as possible over the next 10 months.

There are concerns about putting “math” in the Constitution. Or the unintended consequences we haven’t fully explored; tying the hands of future General Assemblies and municipalities.

Matt Greller, executive director of the Indiana Association of Cities and Towns, notes that the full extent of the caps has only been in place for a couple of weeks. “Someday soon, as the impact of the caps becomes more broadly felt, the reality is that creativity and drive won’t be enough to continue providing the services that residents of Indiana’s cities and towns deserve and expect,” Greller predicted. “When this happens, I can assure you, the leaders of Indiana’s cities and towns will sleep well knowing that we tried to inform lawmakers of the consequences.”

Consequences? We all have a great deal of homework to do so the taxpayer can get beyond the slogans and make a wise decision that we’ll all have to live with for a long, long time.

(The columnist publishes at www.howeypolitics.com)

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