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Thursday, December 6, 2007

Email About Indiana Governor Daniels

I got the following email from the Mitch for Governor campaign. As in most places, property taxes are a huge subject here in Indiana, especially since many got increases in the 25% range this year. Governor Daniels served in President Bush's administration prior to becoming Governor of Indiana six years ago.
It's great to see a tax change that includes manditory caps on spending!

Tax reform rests on reduced local spending
My view: Rex C. Early

Local spending in Indiana has increased from $2.1 billion in 1984 to $7.9 billion last year. These massive increases are neither fair, nor sustainable to the property taxpayers of Indiana.

That's why I support Gov. Mitch Daniels' proposal to cut property taxes for every Hoosier homeowner, capping them forever at a maximum of 1 percent of a home's value.

Make no mistake: This plan is a big change. It will provide real and permanent property tax relief that homeowners need and deserve.

First, it's appropriate that the state assume the costs of child welfare and the remaining school funding. We can pay for this with a one-cent increase in the state sales tax, gaming revenue already earmarked for property tax relief, and a portion of the state's surplus, which Daniels achieved by controlling state spending the last three years.

I do not support tax increases, and this isn't one. I support the governor's plan because it shifts the tax burden away from property taxes, but remains revenue neutral.

Permanently capping property taxes at 1 percent of assessed value will give homeowners stability and prevent massive property tax increases. We should demand that this cap be permanent.

I have read that 55 percent of Hoosiers pay more than 1 percent of their home's assessed value in property taxes every year. But it is important to remember that the 1 percent cap is a maximum. Even those homeowners who currently pay less than 1 percent of their home's value will receive a property tax cut under Daniels' plan.

Perhaps the more critical components of the governor's plan are those that limit the growth of local government spending.

Indiana's 2,400 taxing units have far too much authority and far too little oversight in the way they raise property taxes. Much of the increases in our property taxes come from major construction projects and debt service.

Under the current system, each of Indiana's 2,400 taxing units sets its budget and you get the bill. At no point are those costs added together until they reach the taxpayer.

Daniels' plan would end this practice and mandate that tax boards in each county review all local spending plans to keep budgets in check and protect homeowners from overspending.

Hoosier taxpayers deserve this extra level of accountability, and a more significant role in determining local spending.

The governor's call for replacing the burdensome remonstrance process with a more direct referendum process only makes sense.

In Indiana, new school construction and the necessary borrowing to pay for it has been the single largest factor in rising property taxes. A referendum process not only gives taxpayers a say on the validity of major construction process, but also will serve to directly involve homeowners in these decisions.

When the General Assembly reconvenes, property taxes will be the most significant issue. There will be competing property tax plans and every legislator will have opportunities to bring ideas to the table.

Rightly, much of the focus will go toward Daniels' proposals to cut property taxes and cap them forever.

It is equally important that any plan adopted by the legislature also include the governor's proposals to limit local government spending. Hoosiers should demand nothing less.


Mr. Early is a former candidate for Governor and former Chairman of the Indiana Republican Party. His letter appeared in today's Indianapolis Star.