Times of Northwest Indiana
Everyone loves to hate property taxes.
State Rep. Chet Dobis, D-Merrillville, has even proposed eliminating them. It's an interesting suggestion, but let's take some time to research the idea before rushing to end them.
Property taxes began as a soak-the-rich scheme, with the reasoning that anyone who could own property could afford to pay the taxes. That, of course, was when the American Dream was largely unattainable for Americans of modest means.
Times, of course, have changed. And savvy people now understand that landlords' costs are passed on to renters, so it's not the soak-the-rich scheme that it once appeared to be -- especially with the lightening of the burden on businesses at the expense of homeowners.
The property tax is an expensive tax to administer, requiring an army of at least 1,100 appraisers in Indiana and a highly complex formula for determining the value of the land and structures built upon it.
That formula also leaves a lot of room for subjective decisions by the appraisers, regardless of the rules meant to reduce that possibility.
Property taxes do have their value. For the individual who itemizes his deductions, the real estate tax offers a break on his federal income tax. And for governments, the property tax is one of the most stable sources of revenue because the value of real estate doesn't have wild swings like income.
In Indiana, the property tax is used as the major source of support for local government, paying the bulk of the cost for cities and counties and much of the cost of operating schools.
The General Assembly frequently tweaks the property tax. This year, the Legislature is considering a proposal to make the 2 percent tax cap in Lake County a permanent statewide fixture. That cap prevents a homeowner from having to pay more than 2 percent of their home's assessed value.
And a property tax amnesty program similar to the state income tax amnesty that was so wildly successful is being discussed in the Legislature.
Those reforms have value and should be vigorously pursued even as the debate over eliminating the property tax commences.
Dobis' attempt to eliminate the taxes called for ending them in 2009 and finding a way before then to replace the $5.5 billion raised by property taxes statewide.
Gov. Mitch Daniels seems supportive of granting local governments more authority, including the ability to decide on matters like smoking bans and alternative funding mechanisms.
But before jettisoning the property tax altogether, give the state's policymakers plenty of time to think through the ramifications.
The main questions that must be answered are who should pay for government and how much burden each should be expected to bear.
Answer those, and determining how government should be funded will be easier.
But answering those questions won't be easy. Don't rush into a decision that isn't well thought out.