Greene County Daily World

The Governor Giveth, and the Governor Taketh Away

Posted Wednesday, March 19, 2008, at 11:47 AM
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Property tax relief in Indiana has become more about "robbing Peter to pay Paul" in many ways, depending on your personal situation.

Today, Governor Mitch Daniels is expected to sign a property tax reform bill, which will provide tax relief and supposedly permanently guard against future property tax increases. At the same time, he is offsetting these lost revenues to the State with an increase in sales taxes from 6% to 7% as of April 1st. No, that's not an April Fools Day joke.

As you'll recall, it wasn't so long ago that we saw a one percent increase from 5% to 6%. In fact, that change became effective on December 1, 2002. (Personally, I found the date of this last change as an interesting attempt to collect higher revenue during the 2002 Christmas season, while also coming about a month AFTER the November elections of that year, but I digress.)

To see how we stack up to other states (at least as of January 1, 2007), The Federation of Tax Administrators, a non-profit corporation, provides the following sales tax comparison chart http://www.taxadmin.org/FTA/rate/sales.h...

On the plus-side of these tax changes, elderly Hoosiers should benefit from lower property taxes on their homes, while they won't see higher sales taxes on necessities, such as food and prescription medicine, as both are exempt from Indiana's sales tax. I refuse to say it will benefit the often-quoted "those on a fixed income" because I believe EVERYONE is on a fixed income, but you know what I mean nonetheless.

Some also argue that an increase in sales tax is a more "fair" way to tax since it taxes consumption, as opposed to property tax increases where assessments are often outdated, incorrect, and/or very difficult to gauge the "fairness" from one to another. Some even argue that property taxes are socially counter-productive and lead to less pride in the community since taxes go up as a person takes better care, maintains, and improves a property.

The bill has passed rather quickly, so it's gone from "just talk" to actual law in a short amount of time. Many Hoosiers have been in disbelief all along the short path, too, thinking it would never happen. Well, it is, but I wonder if the haste of this bill's enactment has been actually counter-productive -- at least in the short-term. Many businesses could have had "beat the tax" sales to clear out slow-moving inventory, but they didn't get much of a chance to do so.

If the bill was passed with a later effective date, this could have bolstered sales within Indiana, even though it may have been short-lived. As the national economy is worsening, many belts are also tightening, so it seems people really need some reason to buy now rather than later.

Comments
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Do many think as I, that it is absurd to make the poor, pay a higher sales tax to help the rich that live in Geist or Carmel. Am I right in assuming that the Gov. owns a home in Geist, so in reality the poor who cannot afford to own a home, will be forced to pay a higher sales tax so the rich can get a cheaper property tax. I guess there is still a class system in this state.

-- Posted by not from Greene Co. on Wed, Mar 19, 2008, at 10:24 PM

The rich are also going to be paying a higher sales tax, and they consume more, way more, than those of lesser means. obviously non-property owners are going to be affected more, but you can't make everyone happy with any change in tax code. personally, i'd rather see a sales tax than a property tax any day. the idea that you have to keep paying for something that you already own is ludicrous

-- Posted by corbinsa on Thu, Mar 20, 2008, at 6:50 AM

I agree with you, corbinsa. Though I believe a sales, or consumption tax, should be high enough to eliminate property tax altogether! I have personal friends who have been forced to sell their life-long homes because their fixed incomes could not afford the property tax increase levied upon them. Sure, they made great profits on their homes-but they didn't want to move away from their life-long friends, neighbors and families.

-- Posted by hopeanddust on Thu, Mar 20, 2008, at 8:14 AM

Maybe its time for a tea party.

-- Posted by hmmph on Thu, Mar 20, 2008, at 1:23 PM

the real answer is that the government should be small enough to eliminate property tax altogether

-- Posted by corbinsa on Thu, Mar 20, 2008, at 2:02 PM

So let me get this right, you are all property owners, and you want the poor who cant afford homes to help you pay for them. So I gather that if you own cars, you would like people that live in nursing homes to help you pay for them also. hopeanddust you didnt mind your friends making a profit on their homes, you just hated the idea of them having to move away from their friends and neighbors, do you think that the poor that live in rentals enjoy much of anything.

-- Posted by not from Greene Co. on Thu, Mar 20, 2008, at 3:52 PM

Whoaa there, not from greene county- nowhere in my post did I write that I wanted "the poor who can't afford homes" help me pay for my property, so your post, as well as your logic, is flawed. Furthermore, I did not use the word "hate", or state any other emotional reaction to the fact that their property tax increased to a point where it became to costly for them to stay in their life-long homes. I simply gave you a real-life example of our out-of-control property tax problem.

Though I do believe I understand the point you are trying make, however, I suggest you consider that "the poor" would benefit from lower property taxation indirectly through lower monthly rent. Landlords often pass on property tax increases to their tenants.

-- Posted by hopeanddust on Thu, Mar 20, 2008, at 5:24 PM

not from Greene Co., property taxes do not pay for property. I pay for my property, and have to pay the state and local government for the right to keep property that I own? how is that fair? I want everyone to pay their fair share of government expenses, and I want the government to be small enough that they don't need us to pay umpteen taxes to support it.

-- Posted by corbinsa on Fri, Mar 21, 2008, at 6:23 AM

Corbinsa, government is like a business and this government has been in business for I believe a little over three hundred years and there have been very few times when it was in the black, financially. So it is not realistic that the government is going to take in enough money to satisfy the government, no matter who is leading it at any time. However much they can get is going to be a little or a lot less than they need to spend, at least for the entire life of the Nation, three hundred years. What have you seen that I have not that makes you think the gov. is going to make this dramatic change after three hundred years and start to save money or even have balanced books, during good economic times they have found a way to spend all the money and in bad times they have found a way to spend the same amount or more. Most people under the age of twenty believe it is just one of the perks that you get when you are a leader in gov., to spend all you can. I really just wish someone would say exactly what a small gov is, has there ever been one in history. It is easy for Conservative politicians to say a small gov, but it is just words, buzz words really with no meaning, a means to get elected nothing more. Small governments do not have big bombs, what is so difficult about this concept. And, have you noticed the price of a Mercedes these days and what leaders worth their salt does not have a couple of them. They need the money. Do you know what it costs to send your kids to Harvard? Do you have any idea what it costs for a home in Washington, a condo in the Caymans, a condo in Vail, and a condo for your lover in NY, and the price of new curtains for an office in Washington, DC., and to pay for your old home place on top of all your other expenses? Just drop a line in this blog and tell me what a small government really is, or if anyone has ever seen one. Then we will go snipe hunting.

-- Posted by B ball fan on Fri, Mar 21, 2008, at 2:23 PM

First let me explain how low income housing works, a lady friend manages a 300 unit apt. complex. The rent is 565.00 a month, the renter pays 30% of their adjusted income and the gov. pays the balance to the owner of the complex. The rent is not based on anything affecting the landlords property taxes. Can anyone think of any other instance where the masses pay taxes to benefit the few, as is the case in Property tax relief? So, if I buy a home for 1 million dollars like many of the Colts or Pacers, you believe the people that live in nursing homes and low income housing projects should pay more sales taxes to help pay for that home, the same home they are going to sell at a profit, what is the upside to the nursing home resident? I do remember this Gov. stating he was building a 4 million dollar home in Geist, and I doubt many of the politicians that voted for this sales tax increase, live in low income housing,is it your premise to let the poor help pay for your 1 million dollar homes.? It is a philosophy that I do not share, that it would have been fair to have the slaves pay taxes to help the landowners in the South maintain their farms. When everyone knows the slaves could have made more money playing for the Knicks.

-- Posted by not from Greene Co. on Fri, Mar 21, 2008, at 4:50 PM

Dear "not from Greene Co.", I have a rental unit, and I raised the rent because my property taxes went up.

Not all "the poor" stay poor, I'm living proof of that.

Nonetheless, based upon data from Indiana's local government website, for every property tax dollar collected:

schools get $.54

libraries get $.03

city/towns gets $.16

township gets $.03

county gets $.19

special unit gets $.05

tax increment replacement $ .002

and state gets $.0008

And I gotta tell ya, I haven't received a single check to help me pay for my property.

But seriously, we have a problem when honest, hardworking folks have to sell out just because they can no longer afford $200.00 a month in property tax.

-- Posted by hopeanddust on Fri, Mar 21, 2008, at 7:06 PM

Not from Greene Co., I just remembered who you are...we met one night. You are no doubt an intelligent, decent human being. Namaste!

And I do appreciate your position on property taxation. Unfortunately, for many, I suggest, property taxes are simply too high.

-- Posted by hopeanddust on Fri, Mar 21, 2008, at 8:15 PM

hopeanddust, You also sound like a nice person and quite well read, I know I must come across as an a --- e when it comes to taxes, and the poor, but I admit I do have a problem when Politicians ask anyone to pay more taxes that only helps one class of people. I also own property and am very unhappy with the taxes I must pay, and I do not even live in the area and get the use of the property. But like I have said, why is it also fair to ask someone in a nursing home or someone in a low income apt. to pay more taxes when I am the one that chose to own property. Do you know anyone that is going to lower the rent now that the new law has passed, after all now they will not have to pay more property taxes, so maybe all of the rent in the state will go back to what it was 5 years ago, I think we both know the answer to that.

-- Posted by not from Greene Co. on Fri, Mar 21, 2008, at 10:19 PM

It's not a tax reduction or a shift, it's an increase!

The property taxe reduction won't be fully-implemented until 2010 -- and you'll only see about one-third reduction on average, according to Mitch himself.

HOWEVER, the sales tax increase is almost immediate - effective April 1st in fact!

-- Posted by The Raven on Fri, Mar 21, 2008, at 10:47 PM

Raven, that's exactly what I'm afraid will happen.

I have two friends, Paul & Peggy, who have been life long artists by profession. Early in life, just after Paul returned from fighting in the European theatre in WW2, they bought a modest home on the north side of Indy in the 106th & Keystone Ave. area. They worked hard planting trees, flowers, and shrubs creating a little oasis for themselves and the children they raised there...one door frame in their little nest had the growth progressions of their children notched into the wood. Well, Indy grew and their little bungalow found itself in the midst of higher and higher priced real estate. Well, of course, their property taxes increased along with the value of their property. Then sadly, after the last increase was levied upon them, they had to decide to sell because they simply didn't have enough income to buy groceries & medicine, pay utilities and upkeep, and pay property taxes too...

I stand firm in my belief-property taxes are too high.

-- Posted by hopeanddust on Sat, Mar 22, 2008, at 8:08 AM

Raven is correct, this highly touted Property Tax Relief is nothing more than a bait-and-switch. By the year 2010, we will be paying more in taxes collectively than before this relief was bestowed upon us.

The devil is in the details, and we don't yet know the details of this new law. I suspect we will find there are special carve-outs for the well to do.

The people again spoke loud and clear that we wanted property taxes completely repealed, yet this Governor is delivering higher taxes in disguise. We wanted more responsible government spending, yet this Governor and his strong arming of the legislators has produced no plan for reducing spending. Daniels places the blame on local governments, yet our local officials can only work within the framework dictated by the State.

Come this November, it is time to send Daniels packing and elect an Independent candidate for Governor. One who lives among us and understands the financial constraints we all deal with every day.

Please visit www.bonneyforgov.com

-- Posted by family farms on Sat, Mar 22, 2008, at 9:20 AM

And dear not from Greene Co.,

I do empathize with not only all humanity, but with all life forms, great or small...so I try to do what is right and good. Live simply so that others may simply live. Keep waste and refuse to a minimum. And at every possible opportunity, I am generous to the less fortunate. I really haven't amassed much wealth at all do to my generous nature. What little I do have, came not as a gift, but as a result of my own honest work. I do share. Yet I could do much better as I consider the distribution of the world's wealth, that over half the human beings on this planet go to sleep hungry every night. In the words of Kate Bush "Life is sad, and so is love."

And though I am naturally generous, my survival instinct seems to drive my "need" to store some nuts for the winter of my life.

If there are any nuts left after I'm gone, then it goes to charity.

Sure, we must help the less fortunate, yet folks should not have to move out of their homes because of ever escalating property taxation.

Respectfully yours,

Hopeanddust

-- Posted by hopeanddust on Sat, Mar 22, 2008, at 10:02 AM

One day several years ago my late Father walked into my beauty salon,with one of those frowns that you can tell they are trying not to smile, or jump for joy, but a frown. He said son I just had to go pay seventeen thousand dollars in taxes. At the time it pissed me off,come in and boast about how much money he had made signing papers while I was filing for a refund and working like servant,but he is my Father. I knew my Dad all my life and not one day went by that he did not mention the "great depression" so much so that I still go to a Dr. every month to talk about that damned depression. I stood back and said, as happy as I could, "man you must have had one hell of a year." He broke into a grin and said "ah, I didn't do that bad." We could hardly look at each other, we both knew all too well that he had beat insurmountable odds,who could have believed with his education and my own that he would one day be able to take the time to come and celebrate with me that he had no complaints about making a ton of money, and if the gov wanted to shake him down for a buck, what the hell, he made more than that on a piece of land the feds gave him, and paid him to just not plant anything on it, just mow it every few years. He was a great guy, who did a great job of seeing the good side of many things. He did not mind at all paying taxes on something that made him money, any money. He had a good saying,"it is not what you take in, it is what you keep" that is important.He had an amazing ability to not ever change his lifestyle depending upon his income at the time. It is a difficult thing to master. In short his favorite meal on earth never really changed in the fifty years I knew him and he went from being in the Red, bright red, to the black,and never looked back. Bottom line on real estate, for me;they are not going to make any more, it has always over a 20 year interval increased in value,an acre of land now costs a good deal more than it did twenty years ago. After adjusting for inflation it appears that if you were able to keep it, paying all the expenses, which can be many, it will sell for more than it cost twenty years ago. Some of them make a ton, some of them do not. I call this static. It balances out financially. One could give themselves a good job, and maybe hit it big with something along the way, good times and bad, money and family are different things.I want to keep some money, but I want my grandchildren to marry someone who had a good school,a good chance at contentment.At least as good a chance as I had.Government changes as it becomes more powerful, this has been a fact forever. It has its ups and downs, look at some of the buildings that were built around 1900,built from stone and marble, now built with vinyl siding and brought in on wheels,not that there is anything wrong with that, it just depends how long you want it to last. It would have been nice to have been in America in its "hay_day"--- It rains for a while and then the sun shines for a while.The important thing is what you do with your real estate, do you make it worse or do you make it better,if you can, buy,if it makes money, if you can sell and make money, sell, and buy more that makes money. If it loses money let it go,fold,don't ever lose big. Or as Dad put it, "buy cheap, sell dearly." I believe that big real estate projects take a long time because it takes a while for the right people to own certain real estate, and this can take time,Dad liked to look for his way to way to make money from a game,a game he knew he could never really own but one that could give him opportunity.One must find their niche and make the most it,I guess watch several episodes of the Sorpano's. Taxes are necessary and important to Government,and for a Gov. by and for the people it is important for your children and grandchildren what type of Gov. you elect now, it is important who spends tax money, and what it is spent for, it is not what you take in, it is what you keep. What was the money spent for, good or bad? If you want people to like you,volunteer at the library,nobody likes a landlord,never have, probably never will, if it does not fulfill you, well, few people like their job.Citizenship in ancient Greece, and Rome, was one on the most important things in life, "the rich needed the poor and the poor needed the rich."(Polybius 205-123 B.C.E.) Let us just be glad we are the Romans. This coffee was strong.

-- Posted by B ball fan on Sat, Mar 22, 2008, at 10:31 AM

B ball fan, I love your posts. Anyone who appreciates the lessons and contributions of the ancient Romans and Greeks, as well as the music of Dylan as much as you, means to me I have to give you, and your opinions, serious consideration. Not to mention you're a damn good writer.

Thanks for the interaction. I enjoy it.

-- Posted by hopeanddust on Sat, Mar 22, 2008, at 11:07 AM

B ball fan, was your dad the guy who sold the thousands of acres of the Goosepond property to the State of Indiana twice? Now, that guy made some money selling the easement first then the property second. I'm in awe!

-- Posted by The Raven on Sat, Mar 22, 2008, at 11:47 AM

No it was not my Dad who sold any of a Goosepond,I was just trying to examine the business that was a favorite of my Father.If you can look at a situation and know what you want, and do not pay attention to what someone else wants or gets, a person of little means can move toward their financial goals dealing in Greene County real estate. He would have called this playing to your strengths.I call it focus. It probably was not just one man/woman who made money on the deal. Even the lowest guy on the pile probably believed he had just had a windfall,I suppose it was a surveyor. I have heard there are mushrooms out there, I have never been there to look myself.Much of that part of Greene County has been mined for coal. Reclamation made the land look sterile and empty to me, not at all like it was presented to look.There are deer but they do not wink like the one on television. Coal has been the greatest natural resource in the county over the past century.So, the party is about over as far as the lottery is concerned, or a Morgan type stack, in Greene County real estate.We have almost the least expensive real estate prices in the country and there-in lies opportunities,or strengths, both financial and social. So, "Daddy won't you take me back to Greene County/down by the White River where Paradise lays./I'm sorry my son but you are too late in asking/Mr. Peabody's coal train has hauled it away." (John Prine) Oh, the worlds largest shovel is somewhere out in the country around Jasonville or Dugger right now. Raven, the guy should have sold the land first, then he could have sold the easement for a great deal more.

-- Posted by B ball fan on Sun, Mar 23, 2008, at 4:42 AM

B ball fan, I never said I thought the government would make a dramatic change, just that it would be nice...

for a nice graph of public debt as percentage of GDP over the last 220 years, check this out http://en.wikipedia.org/wiki/Image:US_Pu...

-- Posted by corbinsa on Mon, Mar 24, 2008, at 6:39 AM