Post-Tribune
Gov. Mitch Daniels' proposal to reform the state's property tax system may be the most sweeping tax proposal since the 1973 adoption of Gov. Otis Bowen's tax package that doubled the sales tax as a means to reduce property taxes.
Daniels wants to remove all local public school funding from property taxes. In some area municipalities, the cost of funding schools amounts to as much as 50 percent of a property tax bill. Statewide, Daniels said removing all school costs from property taxes would result in an average of a one-third reduction in property tax bills. To make up for the state's assumption of all school costs, Daniels' plan increases the state sales tax from 6 percent to 7 percent.
Besides removing the schools from property taxes, the governor wants property tax bills capped at 1 percent of a home's assessed valuation. And he wants that put into the state Constitution to prevent future Legislatures from tampering with the property tax system. That is sound reasoning.
And to ensure more parity in assessments, Daniels wants to eliminate township and county assessors and have all assessing run by a professional assessor appointed by the County Council.
While we embrace much of what Daniels has proposed, some questions remain, particularly in the operation of the county Tax and Capital Projects Review Board that would have to review and approve the spending plans of all taxing units within a county. And there are questions about determining the funding level of all school districts.
Daniels' proposal provides a solid foundation for the Legislature to begin debate on tax reform. The worst thing legislators can do next January is allow property tax reform to become a casualty of the 2008 gubernatorial and legislative elections.