There should be no surprise that a local TV poll recently found 62 percent of all Hoosiers were in support of placing property tax caps into the Indiana Constitution.
Undoubtedly, most Hoosiers would see this as a guarantee that their property taxes won’t wander higher at the whims of Statehouse politics.
Voters will have their chance to approve or reject the change to the constitution when they are presented a referendum on Nov. 2.
However, those caps are already in place. They took effect this year with property taxes capped at 1 percent of the assessed value of owner-occupied homes, 2 percent for other residential and agricultural properties and 3 percent for businesses.
And, so far, they have resulted in reducing government’s bulk and by limiting public services.
A statewide report recently showed statewide property tax collections dropped from approximately $2.2 billion in 2007 to just under $1.5 billion in 2009.
Fire and police departments have had to reconsider the emergency services they can provide to the public. Parks workers can’t give the proper maintenance to public green spaces. Libraries are cutting hours. Even non-operating funds for schools are being slashed.
Approval of the referendum would amount to an ongoing knee-jerk reaction to the Hoosier property tax reform that led to the caps.
Many voters will find that the reduction in a bloated government is commendable. But voters should question whether they want to restrict future budget needs with the property cap measure, or whether they want future generations to be able to decide on their own.
Slicing into the Indiana Constitution should not be based on the policies of a governor or a legislature.
In February, a study by Ball State’s Center for Business and Economic Research looked at the economic effects of the tax-rate limits. It found that, though there are reductions in public administration, restaurant and professional services, among others, in the long run (at least three years), Indiana could see growth of 97,000 jobs.
The report didn’t need to address the constitutional referendum because the caps are in place. And, keep in mind, in order to make the 1 to 3 percent caps work, the state’s sales tax was increased from 6 to 7 percent.
Let’s be honest, if it wasn’t for the recession — which no reworking of the constitution can prevent — the property tax caps could work perfectly.
Would placing property tax limits in the Indiana Constitution mean that legislators would just turn to another tax? There’s no guarantee, either way.
Property tax reform is an ongoing legislative issue. We don’t have to make it an issue that reworks Indiana’s constitution.