Local Government Has Sunk the Property-Tax Boat

July 30, 2007

For release Aug. 1 and thereafter
603 words

By Ryan Cummins

Actions by state government have certainly added to the complicated, arbitrary and capricious nature of the property-tax system in Indiana. And there is much the state can do to fix this situation. The responsibility, however, must begin and end with your neighbors holding local elected office.

Speaking as a local elected council member in Indiana with eight years of experience in the job, I must stress that the driving force, the primary reason for the substantial increases in property tax, is your local government run by your local elected officials.

Why is this? First, and most importantly, it is the unending, insatiable, ever increasing demand for your money. This demand never goes down; it always goes up. Many local officeholders have a limitless list of reasons why they need more of your money, and why you don’t. They’re wrong.

Adding insult to the property-tax injury are the additional levies sought by local government outside of the state-imposed limits: Increases or shifts in fees without a corresponding decrease in taxes; the shift in who pays the money, courtesy of abatements; direct payments and loan guarantees to special interests; and the substantial hidden tax increases made possible by TIF districts.

All of this is approved by your local government. It is the reason so many property-tax bills  increased by double digits rather than a more reasonable four or five percent.

Local income taxes were sold to citizens as a way to decrease property taxes. They did precious little in that regard, however, and did much to increase the frenzy of local government spending.

There comes a point, though, when enough is enough. As a taxpayer and as a councilman, I reached that point quite a number of years ago. I hope that many of my neighbors, having received their tax statements and glanced at their paychecks, are there now.

The answer does not lie in electing superior or smarter people to office who will “do better.” There are plenty of good, smart people holding office or seeking office. The answer, rather, is to limit government to only those things that local government both can and should do.

There seems to be no end to the discussion by state and local government on how to tax citizens to operate government. If you want immediate, bipartisan and unanimous support on a single policy question, ask this one: “Who among us Hoosiers feels he is not paying enough already in taxes”? I have yet to meet the man or woman, of any political stripe, who sincerely believe they are not paying enough.

What’s lacking is debate on reducing the size and scope of government. Again, the problem with high property taxes is spending by local government. Property taxation must go down — and by a large amount. That will happen only when local government stops spending so much.

So what are we to do?

• Citizens must demand an end to special deals for some at the expense of you and your neighbors.

• Citizens must demand that those who present a laundry list of their particular “good idea” show some personal responsibility and pay for them themselves; to stop using government to force others to pay.

• Citizens must demand that even those services truly part of government duties be subject to the competition of the free market.

At one time this was the practice in Indiana. It was what Hoosiers expected and demanded of their local government. And the first city or county to restore this practice will be the one to again enjoy the fruits of freedom, manifested by limited government, free markets and personal responsibility.

I hope it’s mine.

Ryan Cummins, an adjunct scholar of the foundation and a Terre Haute businessman, represents the 2nd District on the Terre Haute City Council. Contact him at rcummins@inpolicy.org.

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