Sept. 29th Property Tax Cap Panel After Action Report

The recent meeting at the Hancock County Public Library was largely directed by people in favor of proposed property tax caps. Not exactly a debate on the merits or problems with this proposal! We need to think ahead on this issue and look at the problems and unintended consequences involved.

On the surface, anything with a "cap" sounds great. Let's get taxes under control- let's cap them. Taking a closer look at this issue, maybe uninformed voters will end up being the ones who are capped- as in having the wool pulled over their eyes!

In a recent email, our CCR Legistlative Chairperson, John Priore, pointed out some of the main issues that sound good on the surface, but may have unintended consequences down the line. Here are some excerpts:

Though the caps sound and look appealing on the surface at first glance, they lose all their appeal under close scrutiny. If you set up a model and examine how the caps will actually work, you will be shocked at the unintended catastrophic consequences and fallout.

Factor in CEDIT, CLOIT, abatements, and a host of other giveaway programs. Factor in a statewide effort by INDOT to partner with MOP's and local economic development advocates to persuade County officials to obligate local communities to foot a major portion of the cost of several new road projects which should be fully funded by the State and Federal government. Factor in elimination of the supplemental homestead credit and the elimination or reduction in the standard homestead credit. Add in several newly proposed regional and area taxing boards such as regional public safety boards.

The potential adverse consequences on Hoosier families are mind boggling.The proposed property tax caps in no way guarantee or limit the property or overall tax liabilities of individual Hoosiers nor do they constitute or meet the standard of "fair", "equal" or "uniform" taxation. Nor do they eliminate the problem of the individual homeowners paying and carrying a disproportionate share of the cost of government services and programs. Based on current facts, they will wind up bearing an even more disproportionate share in the future.

In reality, the proposed property tax caps merely allow counties to max out property taxes in unincorporated areas which now are generally taxed at well below the max and/or are less than those paid by individuals residing in incorporated areas with more services. In other words, you will wind up with a somewhat regional flat rate tax system where everybody pays the 1% max without any regard of level of services received or needed. Additionally, counties now also have the discretionary authority to impose at will LOIT, EDIT and other area/regional taxes that are targeted at individual Hoosiers. Farmers, landlords, businesses and of course the so-called "tax exempt not-for-profit" businesses are all generally exempted from these taxes. Consequently, the possible tax liabilities for Hoosier families are now much greater than it has ever been.

You tell me what happens when counties max out on all homeowners. Do they continue to tax farmers, landlords and businesses until they are maxed out or do they impose LOIT, EDIT and other taxes on Hoosier families? I tell you from firsthand experience, it won't be the farmers, landlords or businesses that get targeted.