Tuesday, October 23, 2007

Daniels Property Tax Plan

I have to say I'm disappointed in Gov. Mitch Daniels' property tax reform/relief proposal he unveiled with much fanfare tonight in a live, televised addressed. It is certainly a step in the right direction, but I'm not convinced it goes far enough. Here are the highlights of what Daniels is proposing:

  • Average property tax bills would be reduced immediately by about one-third by shifting school operating costs and the cost of protecting abused and neglected children to the state's budget. This reduction would show up on your May, 2008 property tax bill.
  • A cap on property taxes would be imposed at 1% of a home's "true value". I found it odd the plan used the term "true value" since we abandoned that property tax valuation method in favor of the fair market value approach. I'm assuming that is a "scrivener's error."
  • The property tax reduction will be funded by a one percentage point increase in the state's sales tax and by tapping the state's surplus.
  • A County Tax Board would be created as a single point of accountability to review spending plans by each taxing district, including schools, libraries and fire departments.
  • Major capital improvement projects funded by property taxes will be subject to voter approval by public referendum.
  • Caps of 2% and 3%, respectively, will be imposed on rental properties and business properties. The caps would be written into the state's constitution.
  • Elected township and county assessors will be eliminated. In its place, a single, qualified assessor will be appointed by the county council to oversee a professionally trained staff.

7 comments:

  1. Tapping the state's surplus? What happens when that runs out? People act like shifting costs to the state will solve all our problems. The money still has to come from somewhere.

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  2. Anonymous5:58 AM EST

    Much of this plan works, but raising the sales tax is a dead horse.

    In an economy that's anemic at best, it promises to further slow the purchase of big-ticket items.

    A county-wide tax board is another lasyer of government, appointed, and we don't need it.

    Fingers crossed here, that the Gene Akerses of the world are unemployed before they can get re-elected.

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  3. Anonymous7:44 AM EST

    Just a clarification, the state wouldn't take over levies until 2009.

    The relief for 2008 would come through a huge homestead credit - $950 million worth - largely funded by the sales tax increase.

    Then that sales tax increase would be shifted to take over the levies in 2009.

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  4. Anonymous8:50 AM EST

    Accounting 101:
    Revenue - Expenses = Cash Surplus/Deficit

    Where's the government expense cuts in this plan?

    All I see is shifting and increasing of taxes.

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  5. Anonymous9:03 AM EST

    Daniels Folly / (My response)



    Average property tax bills would be reduced immediately by shifting school operating costs and the cost of protecting abused and neglected children to the state's budget. This reduction would show up on your May, 2008 property tax bill. (Another case of shifting Burdon from one pocket to the other. That WILL result in an increased state income tax. That increase will more than make up for the decrease in PT. )

    A cap on property taxes would be imposed at 1% of a home's "true value". I found it odd the plan used the term "true value" since we abandoned that property tax valuation method in favour of the fair market value approach. I'm assuming that is a "scrivener's error." (Would you like us to water down your Prop 13, so the poison is more palatable? With trending (annual reassessment), they CAN AND WILL increase the value every year. Will your retirement pay cover the increases in your tax? What is 1% of now unaffordable?)

    The property tax reduction will be funded by a one percentage point increase in the state's sales tax and by tapping the state's surplus. (This year! What about when they decide they don’t have enough?)

    A County Tax Board would be created as a single point of accountability to review spending plans by each taxing district, including schools, libraries and fire departments. (Oh gee! Lucky us! We get a different kind of bloated bureaucracy.)

    Major capital improvement projects funded by property taxes will be subject to voter approval by public referendum. (See: Special interest Christmas. Voter apathy will more than make up the difference!)

    Caps of 2% and 3%, respectively, will be imposed on rental properties and business properties. The caps would be written into the state's constitution. (Only if they repeal Article 10, Section 1---Something about Fair and Equal??? Mitch! It’s the constitution-NOT CHARMIN TISSUE!)

    Elected township and county assessors will be eliminated. In its place, a single, qualified assessor will be appointed by the county council to oversee a professionally trained staff. (Wanna bet? The smartest Hill Billy’s in Hill Billy town WILL NOT get the posh positions. Nothing will change, except the name on the front of the building!)

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  6. Anonymous9:42 AM EST

    In an economy that's anemic at best, it promises to further slow the purchase of big-ticket items.

    Part of the reason the economy is slow is because folks have already purchased the big-ticket items. Everyone I know who just had to have an HDTV has one. Those who don't want to spend the money on such items didn't. The folks I know who wanted heavy duty trucks and SUVs, even though they work an office job and really didn't need those, already have them. Plus, it is 1%. Was anyone saying this about the 1% food and beverage tax to support the stadium? I said I was against it, given who got most of the benefit, but was shouted down by pro-Colts folks saying "it is only a quarter!!"

    Well, on a $3,000 HDTV (which I think is now a lot of money), a 6% rate means $180 in taxes. A 7% rate would mean $210 in taxes. If $30 on a $3,000 deal is a make or break, my guess is the folks have no business putting out such money to start with.

    With trending (annual reassessment), they CAN AND WILL increase the value every year.

    Trending can go up, down, or stay the same. All one has to do is have proof. I think it is very unfair to not put foreclosures in the mix, but even without those, all one needs is proof of a few similar home sales and it shouldn't be an issue. The idea that home values _will_ and _must_ increase is nothing more than a sales pitch by the realtor and leanding folks. If government adopts this line of thinking, we will see more lawsuits filed, at which time the courts will slap the government for not using real market value, not realtor/leaning pie-in-the-sky values. My home had not been assessed for three years, they just re-assessed it and the price was the same. Why? Because in a down real estate market, only bad assessors would try to jack up prices for which a home could never go for. The funny thing is that their estimate of my home is likely right on, whereas if they looked, they would see that I paid $8,000 more than what they say it is worth. As such, I feel thankful for not getting taken to the cleaners by my local assessor.

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  7. Anonymous9:32 AM EST

    I would like to see a debate regarding Styring's plan for elimination and see the numbers which Daniels claims won't bring in enough revenue.

    I agree the Governor's plan is a step in the right direction, but it still doesn't protect those of us who spend our blood, sweat, and tears, who rehab homes and see their value escalate.

    Taxpayers should not be penalized for improving property, we should be rewarded.

    The Libertarians have an interesting plan on the table and it is available on Mark Rutherford's blog. They initiated the plan back in 2001. And of course got next to no attention.

    The Libertarians have been drafting "dream policy" for years and saw this crisis looming. I believe they are the only party in Indiana that cares about the welfare of our citizens and lives up to their motto "The Party of Principle".

    Here's the link to Mark's blog:
    http://lpinscr.blogspot.com/2007/10/2001-libertarian-party-of-indiana-tax.html

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