Indy Tax Dollars explains joke played on Hoosiers by Indiana Legislature

From Indy Tax Dollars

March 20, 2008
April Fool!!
If it happened more frequently, one might wonder whether citizens of Indianapolis and Indiana were being taken for fools intentionally - and successfully.

A member of the Capital Improvement Board (CIB) projected that the city would "...make $1.39 million annually from the Colts move." That guesswork was announced 24 years ago, appearing in the local daily paper on April 1, 1984. We'll never know whether the date was coincidental or intentional. But the "guesstimate" was certainly a huge - and very expensive - joke on the taxpayers.

The governor has just signed HB1001, alleged to be widespread, permanent property tax relief for all Indiana taxpayers. We found it intriguing that, of some 600 pages of material which include a wide variety of "protections" for the taxpayer, the first phase to take effect will be a 16% increase in the state sales tax. (Don't want our spenders to worry about funds, do we?) And guess what! The increase in the sales tax becomes effective on April 1, 2008.

We have asked before and we will ask again. If one considers a "cap" to be a permanent, inflexible limit on something, how does one reach that point by calling a percentage of a variable figure a "cap?" Assessments can change every year, and the individual taxpayers who think this legislation will give them permanent relief from property tax increases are living in a dream world. With or without professional assessors - if and when we get them - politicians will play games with assessments.

Our efforts to get a copy off the Internet of Senate Joint Resolution 1 - the constitutional amendment which will place the alleged "caps" in the state constitution - have been unsuccessful so far. Having not seen it, we are curious about the wording of the proposed approach. The publicly stated effort would "cap" residential property (that lived in by the owner?) at 1%, rental and farm property at 2%, and all other - business - at 3% of the assessed value.

We suppose they have covered this, but we do wonder about definitions. If a man owns ten single family residences from which he derives his total income, are those properties "rental" or "business?" Is a ten-story apartment building "rental" or "business" property? If a suburban area homestead contains, as a sideline, a profit-making horse boarding stable while the owner goes downtown to work every day, is that a "business?" Why is a "farm" producing corn and soy beans for sale on the local market not a "business?"

The effect on business generally has disastrous possibilities. There are few "red flags" more significant to a business looking to relocate than the fact that the governmental unit involved can hang a legally sanctioned higher price tag on it than on surrounding properties. And if the residential property owner (read, voter) will have to eye the assessment program carefully, just think what the potential is for game-playing with commercial buildings and industrial plants.
We are seriously concerned that the whole situation might be an intentional scam. The sales tax increase will be in effect and will stand, no matter what. In self defense the business community may find itself paired with the spenders and the likes of the Indiana State Teachers Association (ISTA) in an effort to defeat or to change the proposed constitutional amendment. (An amendment must pass, in identical form, two separately elected legislatures.) The ISTA already has pretty effectively neutered the referendum provisions originally offered, and it is against "caps" because it wants no limits, no how, no way, on revenues to which it is "entitled."

We fear that HB1001 could turn out to be the most successful - and most damaging - April Fool trick ever pulled off in the state of Indiana.