Hoosiers vent over property taxes

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Indianapolis - Property taxes are again a hot button at the Statehouse. Hoosiers went face to face with lawmakers at the Taxing Time Town Hall meeting Wednesday night.

There were occasional boos and the shaking of disapproving heads, but mostly there was a lot of discussion about the topic still on many Hoosiers' minds: property tax reform.

WTHR, WFYI and The Indianapolis Star hosted the event. Over 100 central Indiana residents and community leaders posed questions to a panel of lawmakers.

People asked questions ranging from property tax elimination to appraisals to school funding.

"I have seen my bills go up each year - a thousand dollars each year," said Andrea, a Greencastle resident. "I've lived on my property almost 50 years and want to stay there until I die; I probably can't sell it anyway. Property tax is so unfair - why can't we just abolish it?"

Rep. David Orentlicher addressed the issue of abolishing property taxes. "I wish we could," he said, but explained that lawmakers "looked at that possibility, looked at the taxes we would have to increase. The kind of increases we would have to implement in sales and income taxes to cover the lost revenue - people realize that it doesn't work. Another thing people realize we have important services that we have to provide, people want to feel they are getting their money's worth."

Another woman raised the question of people who are forced to cut back on their prescriptions so that they can pay their property tax, while another question focused on the city's decaying streets and sidewalks, asking, "I want to know what I'm getting for my property taxes."

"Legislators are just like you. We all pay property taxes. Most of us have homes; we are just as concerned. Frankly I have never seen an atmosphere where Republicans and Democrats are just as dedicated to trying to fix the property tax system and frankly we are going to get that done this year," said Rep. Jeff Espich (R).

Landlords said they're feeling the pinch, with one saying, "Right now are taxes are so high we can't maintain it anymore."

"We do need to do better by the renters. An important part of the proposal is to make sure we don't make property taxes unaffordable for the landlords," said Orentlicher.

Realtors are also seeing the impact. "I used to have people call to say they're selling. Now they call because they're going to lose their house."

Others criticized school spending. "The single biggest reason for the problem is out of control spending on lavish schools."
 
One woman took on non-profits. "Non-profits have been subsidized since the beginning of time," she said, asking why it was considered politically incorrect to question non-profits' tax-exempt status.
 
Legislators, who've been debating the governor's property tax plan, vowed to take action.

Sen. Luke Kenley (R-Noblesville) said it was a complex problem that took a long time to develop. "We do need to reduce property taxes dramatically."

But they also cautioned it won't be easy. "Everyone wants schools, public safety, trash removal and someone has to pay for it," said Rep. Bill Crawford (D-Indianapolis).

Advance America's Eric Miller touched off a heated exchange when he suggested repealing property taxes. "It can be done under our plan by cutting spending, a two-percent sales tax increase and a one-percent income tax increase," he said.

Miller's suggestion was met with bipartisan opposition, with Rep. Espich pointing out that the property tax repeal bill had already been given a hearing and that the numbers didn't add up. At one point Espich turned to Rep. Bill Crawford (D-Indianapolis) and, after jokingly pointing out their political rivalry, asked Crawford to confirm that if the property tax were abolished, the state would need to raise the sales tax to 13 percent to make up for lost revenue.

Earlier on, Minority Leader Brian Bosma (R) asked those who support complete elimination of property taxes where the $3.5 million paid by businesses would go. "You are going to pay for that in sales and income taxes and I don't think that is fair." However, Bosma said Republicans would be willing to look at elimination in five years or so.

Lawmakers are reluctant to raise the sales tax too much. As Rep. Espich pointed out to one resident who asked him to comment on income vs. sales tax increases, merchants who do business near the state borders are in competition with other states. If the sales tax in Indiana increases by more than one percent, he argued, those businesses would lose money.

Espich got applause when he answered the Mayor of Greenwood's question about why lawmakers don't give local governments more autonomy. Espich pointed out that local communities were given the option of the county option income tax to raise funds locally, but most didn't take it. "The reality of the matter is government spending is out of control," he said.

Another resident criticized the appraisal process, saying it was unfair, and that after appealing an increase, saw his bill double again.

The Hendricks County deputy assessor pointed out that assessors were getting a bad rap, and it was local governments approving spending in their budgets while assessors get blamed for the problem.

Indianapolis Public Schools took criticism for building too many new buildings and construction projects. But Superintendent Dr. Eugene White said that under House Bill 1001, which is the property tax reform bill, IPS districts would lose money and that he didn't see a way to make up for the shortfall. "We need an answer how we are going to replace that lost revenue."

Rep. Crawford said that the state constitution requires lawmakers to support public education and that a solution must be fair and equitable. "I say that by the time we get to March 14 we either have a solution or we don't."