AARP Casts Cautious Eye on Tax Proposals
By: Source: AARP.org Date Posted: 2007-12-19 16:52:12.667683-05:00
Indiana's shift to a market-value system of property taxes is hitting Hoosiers where it hurts - their pocketbooks.
In April, the nonpartisan Legislative Services Agency predicted a 24 percent statewide average hike for taxes paid in 2007. But many homeowners have received much higher bills since then, and some of those were on top of sizable hikes in 2003, the first year of the market-value system.
Gov. Mitch Daniels and the Indiana General Assembly are scrambling for solutions, which they hope to craft by the legislature's scheduled adjournment in mid-March. House and Senate committees have already held December hearings on the governor's proposed solution, and many more will follow.
Many voices are at the table. Some are urging radical reform, including complete elimination of the property tax. But consensus seems more likely to form around some combination of spending caps on local governments and schools, a cap on taxes as a percentage of assessed value, and a partial shift from property taxes to sales and/or income taxes.
Some restructuring of local government may also occur, including consolidation or elimination of such offices as township assessors.
AARP Indiana will play three roles in the debate.
First, we will inform members and nonmembers about proposed solutions and about trusted sources of data and other information. The Web site of the Indiana Department of Local Government Finance includes the governor's complete plan as well as tax and assessment data for all 92 counties. We also encourage you to consider an array of information and comment from Purdue University economist Larry DeBoer, available online.
Second, we will support changes that are consistent with broad principles of fairness, efficiency, and revenue stability for important public services and infrastructure. Generally, those principles argue for income-based tax relief over age-based relief, and the use of income taxes over the more regressive sales tax, especially when the sales tax is narrowly applied. They also suggest caution before specific spending or tax caps are placed in the state Constitution, which would frustrate a nimble response to fluctuating fiscal circumstances.
Third, we will seek your opinions throughout the process and convey them to elected officials.
You have already responded to an initial call for feedback through this Web site and our free Hoosier Advocate newsletter. Please tell us more. Send e-mail to Martin DeAgostino, or call him toll-free at (866) 448-3618.
And if you aren't already receiving the Hoosier Advocate, please use the same e-mail or phone number to request it. It's free.
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