The Indiana Fiscal Policy Institute released the results of a study about the fiscal impact of property tax caps. Not surprisingly, the supposed nonprofit organization makes the case in its report that property tax caps are negatively impacting local government's ability to raise sufficient revenues to pay for necessary services. The nonprofits's executive director, John Ketzenberger, is troubled that property taxpayers save about $727 million statewide, which in actuality is a drop in the bucket compared to the savings they get from other exemptions, deductions and tax abatements.
In a recent column in the Indianapolis Star, Ketzenberger described his organization as "a nonpartisan government watchdog" that he says "cannot lobby government" and that "conducts independent research on important fiscal questions and then publishes that information." Let me begin by disabusing you of any notion that Ketzenberger's organization doesn't have its own ax to grind. Its board is comprised almost entirely of lobbyists for industry, big law firms and local government. His suggestion that his organization acts as a "watchdog" is laughable on its face. "The caps certainly have saved property taxpayers significant money, but the question of whether it's good public policy remains open because local governments are still wrestling with the results," Ketzenberger laments.
The organization's report is most concerned about the impact of property tax caps on cities and towns, which it says the data shows are harder hit than counties, school districts, libraries and other units of local government, except for townships. Completely missing from the analysis is the far larger impact that economic development incentives municipalities offer in the form of real and personal property tax abatements, which impacts all units of government, including those like school districts which rely exclusively on property taxes for their local funding. Businesses save about $6 billion dollars annually statewide from property tax abatements. Municipalities have further eroded the property tax base by billions of dollars through the use of TIF districts, which in some counties consume as much as 16% of the property tax base. TIF expenditures primarily benefit a relatively small, selective group of business taxpayers.
According to the institute's study, counties hit hardest by property tax caps include Cass, Delaware, Elkhart, Fayette, Howard, Madison, Marion, Posey, St. Joseph and Vigo. Not surprisingly, most of those cities and towns in those counties severely eroded their tax bases by offering generous property tax abatements and creating TIF districts. The institute's study would lead you to believe the loss of the industrial base is to blame for the disproportionate impact of property tax caps.
The institute's attempt to demonize property tax caps is deceitful to say the least. Unfortunately, most news reports I read about the organization's report took it at face value because they've been conditioned to believe that property tax caps were an irrational public policy decision state lawmakers and former Gov. Mitch Daniels made to placate Tea Party types. Think twice before you give any credibility to any report produced by the Indiana Fiscal Policy Institute. It's just another special interest group hiding behind its self-serving watchdog label. It could care less about the impact of the state's tax policies on ordinary taxpayers.
I agree with you 100%. Let's look at an example of property taxes run wild: Rockford, Illinois. Over the last 10 years, they jacked up property taxes to the point where you'd be paying $3K or $4K on a home worth less than $100K. The result? Property values plummeted, and tax revenue went with it, taking people's wealth down with it. None of this helped Rockford escape being a crummy city with infrastructure and crime problems out the wazoo.
ReplyDeleteThe property tax caps haven't gone far enough, they also need to address the assessment value scam which they raise at whim which is arbitrary with ever widening reasons when they get the notice from above that they need more money. Trusting aren't I? No one should owe the government to own and keep their property. It's is almost full time to keep up with their machinations.
ReplyDeleteTheir base lie (baseline) asserts mythical “savings” from what were criminal overcharges / taxes, using those unConstitutional or inflated numbers of 2007 as their starting point. They manufacture the problem & publicly pleasure themselves with false claims of having "solved” the problem they created. The institute’s trumpets crony statism & is therefore anything but “nonpartisan.” Translation: "Analysts" get comfortable with his station, don't want to rock the boat or lose access to sources that afford them an illusion of legitimacy & profession- making them kept creatures of the state with careers parked in a system of adult daycare.
ReplyDeleteIn the "love the sinner but hate the sin" category; there's no need for heads on pikes or in stocks for public humiliation and / or perverse consumption. We do however need to vigilantly & rigorously attack the sins of statism & its formulaic deception / fraud; upon which it solely relies for its advancement. The emperor’s naked, but we shouldn’t be convinced to dress like him...
A sub-text or theme of “oldest cities” being hard hit is somehow the suggestion that if they’d get it in gear & develop more business (like the other statist kids), they too could afford the unConstitutional excess of morbidly proportioned bad government.
Back ground is important: John Ketzenberger, a former Star staffer and IBJ editor, and currently the president of the Indiana Fiscal Policy Institute. He also a member of the totally bogus Indiana Week in Review.
ReplyDeleteI think I can be fairly confident the Indiana Fiscal Policy Institute has never critiqued the vast amount of tax dollars funneled and skimmed into the pockets of the Colts, Pacers and the Circle Center Mall as a diversion/confiscation of tax dollars as Corporate Welfare.
The Crony-Capitalist Club includes the recipients of Corporate Welfare, along with the Elected Political enablers and the Media.
And Ketzenberger has spoken approvingly on Indiana Week in Review of approving a publicly-financed stadium for the Indy Eleven.
ReplyDeleteGust @ 8:01 Certainly caught on to the rising assessments as just another TAX. If we could all sell our Car-Mel houses at their assessed valuations, we would MOVE instantly. Just can not wait for the next Car-Mel school referen-"dumb", and the next Brainard tax increase.
ReplyDeleteVoter ignorance and apathy are responsible for these fiscal troubles!!!!!
The days of many under-assessed properties ended as soon as property tax caps went into effect. I agree. It's not at all uncommon to see homes sold for less than their assessed value, the opposite of which was true before tax caps were enacted.
ReplyDeleteThis system is codified, structural fraud. We're now in a new & corrupt era of fraudulent "trending;" whereby commercial owners of older existing properties will find their assessments are counterfeited to invented values matching those of A grade subsidized, TIF developments; at 3% of those criminally inflated "values." As existing owners struggle to keep up with confiscatory or escalating hyper-tax; their best option is to move or close, in an attempt to out run the fiscally murderous greed of pub sect swamp creatures.
ReplyDeleteCalifornia eliminated TIFs; not because they don't like stealing / spending public dollars, but due to the aforementioned scheme which predictably hollowed their false economy; one of unConstitutional real estate development, by greedy fascists / statists posing as "representatives" of the people.
I don't like the graduated 1%, 2%, 3% rates. I think the constitution requires Indiana property be taxes the same. We put a single family residence on the market when we moved. That house began to be taxed at the 2% rate, because you can only have one "primary" residence at 1%. Well, the house didn't sell. And 2 years later, we pay $3100 a year on an empty house, plus utilities which include $150 month water/sewer charges on an empty house. The realtors say the house isn't selling because a house across the street got bought by a California investor who turned it Section 8 and there have been so many police runs and trash problems, and in the summer you can see a dozen black people at a time out on the porch. There has been such a flurry of homeowners selling, at rock bottom prices, that the entire composition of the neighborhood seems to have changed. I guess I'll have to slash the price. This is what Section 8 does. Of course our property taxes look pretty good if you only look at primary residences. But a lot of people own commercial property, lots and rentals, and they pay much much more, and they also suffer worse when it comes to assessments. I bought a lot next door to a home I owned for $5k, and the next year they raised the assessment to $20k. Ask business owner what they think about paying their commercial rate assessed prop taxes when it seems like half the property in the county is exempt. Someday I'll retire. And I don't want to live anywhere near TIF zones, Section 8 housing, or Historic districts. Personally, I think this city is going into the toilet. But they seem to be happy with their bike lanes. If they don't get the murder rate down there's not going to be anybody left to pay their crappy taxes.
ReplyDeleteBack to old Mitch Daniels and the Meridian Mansion Madness. Caps are wrong. They, the assessors, manipulate property tax values to make up the difference. My house was $161k when I purchased it. My house was re-assessed 14 months later and it was valued at $182k and I made no changes to the house or property at all. I contested the reassement and "won". It stood at $161k. The reason caps came about was the Meridian Mansions were reassessed (under fair market value) after years of under assessment (by underhanded politicians specifically county assessors). 2 things have occurred since the caps. One property values are going through the roof, specifically, farmland. 15 years ago, an acre of farmland in Dekalb County at $800 an acre. Now, in is over $1400 and acre and rising. Good thing? If the farmer sells the land after years of holding it, yes. Bad for the food consumer because taxation is part of cost of business he passes the cost on. Two, zoning boards are wanting more high end structures on properties in order to make money. Case in point, Hamilton County zoning officials are zoning housing starts at $250K and up. No modest affordable housing available. Lastly, wait till the next real estate bubble bursts. Then we will see schools and lawmakers scramble.
ReplyDeleteThe political / fooling class doesn't operate a budget. What they have is a spending plan & "budgeting" is what they demand to cover their excessive spending / misappropriation of the public treasury.
ReplyDeletePrices aren't going up. Median price of a home is still the same. You can buy houses all over Indiana for 50k. You can buy houses, thousands of houses, in Indianapolis for 50k. Don't talk to me about Hamilton County. Carmel and Zionsville are the only two rich counties in the state. They don't look like the rest of the state, and their property values are running inverse to their city's debt. If Putin ever declares war on the United States, he will strike military targets, yes. But he will also drop a tactical nuclear weapon on the wealthiest county in every State. So Carmel has a big, big target on it militarily. We're involved in military conflicts all over the globe. How long till it comes to our shores? I wouldn't live in the richest little enclave in Indiana for anything. If history teaches us anything, first they kill the lawyers, then they round up the rich guys.
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