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| Indiana Farm Bureau touts break for property owners |
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By NANCY VORIS
Indiana Correspondent
INDIANAPOLIS, Ind. — It seems Indiana Farm Bureau (IFB) and the Chicago Cubs are playing in the same ballpark. Both have been striking out – the Cubs are one year short of a century of World Series no-shows or losses and Farm Bureau has cried foul on Indiana’s property taxes for 66 years.
Last week, IFB took aim, and hopes to at least make it to first base on property tax relief.
The organization has been on a quest to eradicate property taxes for good, but even with legislative approval, the process would take years to implement. To take care of the immediate problem, IFB announced a plan that would lower Indiana property taxpayers’ burden by more than $2 billion, reducing the total property taxes charged by about one-third.
Sen. Luke Kenley (R-Noblesville) is chairman of the Commission on State Tax and Financing Policy, which is studying the property tax issue and will make proposals to the legislature in November. Katrina Hall, tax and local government specialist with IFB, is a member of the commission.
Kenley calls IFB’s recommendations realistic and responsible. “I appreciate they’re willing to step up with what looks like a responsible plan,” Kenley said. “Everyone talks about eliminating this levy or that, but it’s hard to accomplish.”
Don Villwock, president of IFB, made the announcement at the Indiana Statehouse on Sept. 24. He said the plan implements the principles for property tax reform as adopted by its grassroots members: Removal of entire tax levies, relying on taxes that are based on taxpayers’ abilities to pay and treating all taxpayers the same.
“Relief that is only targeted to one segment of our society and economy cannot and will not be permanent,” Villwock said. “Farm Bureau and our members are tired of Band-Aid approaches. Farm Bureau is asking the legislature and the governor to work with us to make sure property tax reform is truly permanent, substantial and – most importantly – fair.”
IFB said five categories of expenditures now funded by local property taxes, totaling an estimated $2.105 billion in tax liability, could be funded instead by state sources. Those categories are:
•The school general fund, which currently is estimated to be about $800 million;
•School utilities and insurance expenses from the school capital projects fund, estimated at $205 million;
•All remaining welfare levies, estimated at $350 million;
•Levies used to support local court systems, which may be as much as $350 million; and
•A set-aside for a new school “rainy day” fund, estimated at $400 million (when this fund reaches a sufficient level, the plan calls for annual school debt reduction grants of $400 million).
To fund the expenditures, IFB suggests increasing state personal income tax from 3.4 percent to 4.4 percent, which would raise about $1.225 billion, and increasing the sales tax from 6 percent to seven percent, which would raise $880 million. Those increases would meet $2.105 billion of the revenue now funded by property taxes.
“I personally think the Farm Bureau plan has elements that the Commission will use as part of its recommendations,” Kenley said. “In particular, the idea of complete elimination of some levies to be paid for by some other mechanism is a very good idea, and one I hope the Commission looks at.”
He said the 2008 General Assembly is a key session in accomplishing property tax reform. Joining IFB in lobbying for change are apartment owners’ associations, manufacturers and chambers of commerce.
“I think people are working on it now, and I appreciate Farm Bureau taking the lead and taking specific leadership,” he said.
IFB members adopted a policy in August supporting “permanent and substantial measures to free Hoosiers from the burden of property taxes.” The organization has always lobbied against property taxes because they are not based on a landowner’s ability to pay. Company layoffs or a bad crop year for a farmer do not matter – the property taxes will still be due.
According to estimates by the Legislative Services Agency, net property taxes in Indiana grew between 2006 and 2007 by about $800 million – an increase of more than 14 percent. This is nearly six times the current rate of inflation. |
| 10/3/2007 |
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