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| 3 Hoosier lawmakers might sign on for property tax reform; not repeal |
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By ANN HINCH
Assistant Editor
INDIANAPOLIS, Ind. — In an effort to rally voters to support his proposal to have the state legislature put a property tax repeal referendum to the public, Advance America (AA) founder Eric Miller keeps a sheet of names – those of Indiana state lawmakers who support a repeal, and those who don’t.
Sen. Beverly Gard (R-Greenfield) and Rep. Phil Pflum (D-Milton) – both listed by AA as “anti-repeal” – said they each received a pledge card from AA to mark whether they support a property tax repeal. Neither signed the card nor mailed it back.
(Miller could not be reached by phone to explain how he determined these listings.)
“It’s too soon to make a commitment on that approach,” Gard said. “I think it’s way, way too early for legislators to sign on.”
Pflum said before he signs anything, he wants to know the source of the replacement revenue, as well as specific numbers. “I want to know what the cost is to eliminate the tax,” he explained.
Both said with proposals they’ve seen so far to eliminate the tax entirely, they’re not in favor, though they wouldn’t turn down a good plan. “I don’t think there’s a legislature who wouldn’t like to get rid of property taxes,” Gard said, “but the question is, can they do it?”
Pflum doesn’t think it’s possible. “For (AA) to suggest that you can abolish property taxes is like looking for a rainbow on a clear, sunny day,” he said, adding he could’ve signed the pledge card to endear himself to some voters since he’s running for reelection next year – but he couldn’t deliver on the promise.
Even Sen. Brandt Hershman (R-Wheatfield), who appears on AA’s list as “pro-repeal,” said that doesn’t accurately reflect his position and he said nothing about a pledge card. “I am strong pro-reform,” he explained. “But I have always had some concerns about how you make the numbers add up.”
His problem with AA’s list is he said it sends a “false message” about some legislators’ willingness to support property tax reform. “I welcome Eric’s strong views and pushing the issue on many fronts,” he said. “That’s admirable. But the devil’s in the details.”
According to Gard, property taxes raise $6.1 billion statewide for schools and local services in counties and cities. If that tax were repealed, she said the sales tax might have to jump to 13.5 percent to replace it. With 60 percent of Indiana’s population living near a border state, “someone in Knightstown could go to the Ohio line and buy their car in Ohio,” she said.
Hershman said this is a real possibility for big-ticket items like cars and jewelry. “I don’t think for your typical trip to Wal-Mart, you’re going to drive to Ohio to buy toothpaste,” he said. But, he added that Indiana is a big RV state and could lose business if sales tax is higher than in neighboring states.
Besides, he believes there are services property owners receive that they should have to finance. For example, Indiana has homeowners for whom the property is not their primary residence – such as Illinois residents who buy land here – and Hershman doesn’t believe it’s fair to ask others to completely pay for their fire and police protection.
Details, details
AA’s plan is to replace property taxes with a two-percent increase in sales tax and a one-percent hike in income tax. Hershman said if Indiana’s income tax rate stays competitive with other states, that’s fine, but if it goes too high, some workers might elect to move elsewhere.
Last week, Indiana Farm Bureau (IFB) put forth a proposal to reduce property taxes by one-third (see Page 1C article). Based on what he knows, Pflum said seems a reasonable option, though he still wants to know what the Commission on State Tax and Financing Policy will recommend in November. What he ends up supporting has to be “reasonable, practical and possible” for permanent reform.
He does agree that school, court and welfare costs are the state’s responsibility and should not left to local property owners.
Hershman, who serves on the state tax commission, does not want to finance education with property taxes. He believes IFB’s plan “has merit” but has drawn no specific conclusions whether to support its numbers, though he would like to reduce governmental reliance on property taxes and supports spending cuts.
He cited a 1970s reform in which the state financed 20 percent of property tax increases and said this worked for a generation.
Gard said the most realistic approach will probably be permanent reform that allows the state to take over financing schools’ general funds through a combination sales/income tax increase and property tax reduction.
She said it has to be “substantial, fair and permanent.”
She said a constitutional amendment to repeal – if successful – wouldn’t take effect for a few years, whereas if enough legislators agree on a plan for property tax reduction, they could vote to enact it in 2008.
She hopes Senate committee hearings will begin in November so the General Assembly can vote on something shortly after it convenes in January.
“Certainly, reducing property taxes by one-third or one-half would be something to achieve, and never let them go back up,” Gard said.
Historically, Pflum said lawmakers have shifted the tax burden from one group to another but not made it fair all around.
At 63, he and his wife are near retirement and have an active 80-acre farm. A property tax repeal would be, he said, a “win-win-win” for them, personally.
“But I’m not up there to vote for Phil and Diane Pflum,” he said.
“I’m there to represent the people of Indiana.”
He added if a homeowner’s mortgage is paid off, they are “in a better position to pay (their) taxes on it than if (they) owe on it.”
To learn more about the state tax commission, visit its website at www.in. gov/legislative/propertytaxreform and to read specifics about Farm Bureau’s proposal, visit www.infarmbureau.org/ NewsRelease.aspx?id=2432 |
| 10/3/2007 |
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