Repeal Indiana Property Tax


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This presentation discusses how homeowners, businesses, and municipalities would benefit from a repeal of Indiana's proprty tax and presents a plan for accomplishing repeal.

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    guest6431f0g, could we please keep you informed of efforts -- and progress -- to get property taxes repealed ? Contact: to get timely information on how we are trying to restore lost property rights to all Hoosiers.
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  • I agree Indiana Property Tax is absolutely out of control I am in Scott County and 2009 Bill increased almost 1/3 SOMETHING MUST BE DONE AND NOW
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Repeal Indiana Property Tax

  1. 1. Repeal Indiana Property Taxes Citizens movement to effect fair taxation as required by the Indiana Constitution
  2. 2. # 1 Issue Facing Hoosiers <ul><li>Even after all of the </li></ul><ul><li>Indiana General Assembly </li></ul><ul><li>gymnastics, we still have a </li></ul><ul><li>property tax crisis in Indiana </li></ul>
  3. 3. <ul><ul><li>Property taxes are too high and they continue to go up. Property taxes have increased over 450% from 1980 to 2005. </li></ul></ul>
  4. 5. We have a crisis not because Hoosiers don’t pay enough in taxes, but because government spends too much!  
  5. 6. <ul><ul><li>Other plans that have been proposed that would give local government the authority to permanently raise other taxes will only result in temporarily lowering property taxes. </li></ul></ul>
  6. 7. <ul><ul><li>The only plan that would provide permanent protection to property owners is to repeal property taxes in the Indiana Constitution. </li></ul></ul>
  7. 8. <ul><li>Government bureaucrats love property taxes because they offer the most opportunity for taxpayer abuse </li></ul><ul><li>Unequal taxation in our 92 counties </li></ul><ul><li>Exploiting appraisal inconsistencies </li></ul><ul><li>Using historical valuations during market depression </li></ul>
  8. 9. <ul><ul><li>Senior citizens, homeowners, farmers and businesses will lose their property if they cannot pay their property taxes. </li></ul></ul><ul><ul><li>You never really own your own home! </li></ul></ul>
  9. 10. Because of property taxes your home, your family, your future and your retirement are at risk.  
  10. 11. The American dream of owning a home has been taken from all Hoosier families.
  11. 12. Four Goals for Property Taxes <ul><li>To own your own home </li></ul><ul><li>To be able to vote to repeal property taxes </li></ul><ul><li>To not repeat history (for over 70 years every time the legislature raises taxes or creates a new tax in exchange for lowering property taxes, property taxes go back up) </li></ul><ul><li>To have a permanent solution  </li></ul>
  12. 13. <ul><li>Advantages to Repealing Property Taxes </li></ul><ul><li>you would be able to own your own home </li></ul><ul><li>2. there would be no more property tax increases </li></ul><ul><li>3. citizens would be able to vote to repeal property taxes </li></ul><ul><li>4. state and local government spending would be controlled. </li></ul>
  13. 14. The only solution to permanently protect homeowners, senior citizens, farmers and businesses is to permanently repeal property taxes with a Constitutional Amendment
  14. 15. A Legitimate Plan <ul><li>No effort to repeal property tax will be taken seriously unless it is accompanied by a plan to replace resulting lost revenues. </li></ul>
  15. 16. How to Fund the Repeal <ul><li>Estimated property taxes in 2012: $6.641 billion </li></ul><ul><li>2012 would be first year without property taxes. Estimate based on limiting local spending increases to inflation and population growth. </li></ul><ul><li>Savings from state spending cap in 2012: $1.543 billion </li></ul><ul><li>Based on limiting state spending increases to inflation and population growth. </li></ul><ul><li>Business replacement revenue: $500 million </li></ul><ul><li>Will not begin until property taxes are eliminated. </li></ul><ul><li>Sales tax increase – 2% : $2.454 billion </li></ul><ul><li>Will not begin until property taxes are eliminated. </li></ul><ul><li>Income tax increase – 1% : $1.638 billion </li></ul><ul><li>Will not begin until property taxes are eliminated. </li></ul><ul><li>Administrative savings from eliminating property taxes: $250 million </li></ul><ul><li>State and local government expenses eliminated. </li></ul><ul><li>No need for reassessment. </li></ul>
  16. 17. Property Tax Elimination Fund <ul><li>Fund set up in 2007 to receive state revenue that exceeds the state spending control of inflation and population growth. </li></ul><ul><li>After 2011 the amount in the property tax elimination fund will exceed $3.5 billion. </li></ul><ul><li>Utilizing $300 million in 2012 will leave a reserve balance of over $3.2 billion. </li></ul><ul><li>* Source: Indiana Legislative Services Agency and Indiana Handbook of Taxes, Revenues, and Appropriations - Fiscal Year 2006 </li></ul>
  17. 18. TOTAL REPLACEMENT FUNDS, $6.685 billion <ul><li>Amount available to replace property taxes in 2012 does not include: </li></ul><ul><li>Amount remaining in property tax elimination fund of over $3.2 billion. </li></ul><ul><li>Interest from property tax elimination fund which could exceed $600 million by 2012. </li></ul><ul><li>Sales taxes and income taxes generated from economic growth. </li></ul><ul><li>* Source: Indiana Legislative Services Agency and Indiana Handbook of Taxes,Revenues, and Appropriations - Fiscal Year 2006 </li></ul>
  18. 19. Enough money could be raised to replace funding from property taxes by controlling state and local government spending and by increasing the sales tax 2% and the income tax 1%
  19. 20. The Governor’s plan includes a Constitutional Amendment to cap property taxes, whereas this plan has a Constitutional Amendment to repeal property taxes.   The Governor has the wrong Constitutional Amendment !
  20. 21. <ul><li>Property tax caps will not: </li></ul><ul><li>fix the broken tax assessment and collection system. Caps are glorified Band-Aides – a temporary fix to a continuing problem. </li></ul><ul><li>change the fact that property tax is the most expensive tax to collect. </li></ul><ul><li>change the fact that your home will continue to be held to a subjective assessment performed by a government official or government contractor working within a very broken system. </li></ul><ul><li>Property tax caps mean that: </li></ul><ul><li>farmers, landlords, and businesses will pay a higher property tax than everyone else and won’t make taxation uniform and equal as required by Indiana's Constitution! </li></ul><ul><li>landlords pay a higher property tax and will have to pass their tax on to renters. </li></ul><ul><li>farmers who raise our food will pay a higher tax and have to pass the tax on to everyone who eats the food they raise. </li></ul><ul><li>businesses will pay higher tax and have to pass the bill on to every customer who buys their products and may make it harder for Indiana businesses to compete. </li></ul>
  21. 22. Opponents of efforts to Repeal Property Taxes are using scare tactics to try to stop this effort. Opponents are saying that in order to Repeal Property Taxes the state would either have to raise the sales tax to 13% or raise the income tax to 9%. These opponents are intentionally trying to mislead the public.
  22. 23. Dr. Craig L. Johnson > at Indiana University since 1992 Associate Professor of Public and Environmental Affairs at SPEA-Bloomington > received his Master of Public Administration and Ph.D. degrees from The University at Albany, State University of New York > His primary research interest focuses on improving how government finances are managed
  23. 24. <ul><li>Dr. Johnson's Study has determined conclusively that if property taxes are repealed with a Constitutional Amendment, property taxes can be replaced: </li></ul><ul><li>By controlling government spending at the state and local level. </li></ul><ul><li>2. By setting up a Property Tax Elimination Fund to receive state money over and above the state spending control. </li></ul><ul><li>3. By enacting a 2% sales tax increase and a 1% income tax increase and business replacement revenue of $951 million, only after the voters vote in 2010 to Repeal Property Taxes (This amount for business replacement revenue is not a tax increase. It represents a reduction of over 50% in the amount businesses would be paying in property taxes in 2012 according to Dr. Johnson.) </li></ul><ul><li>4. By using over $100 million in administrative savings from Repealing Property Taxes. </li></ul><ul><li>5. The figures do not include: </li></ul><ul><li>any growth in state sales or income taxes from economic development that occurs from the Repeal of Property Taxes. </li></ul><ul><li>interest on the Property Tax Elimination Fund which is estimated to be in excess of $250 million in 2012. </li></ul>
  24. 25. Repeated Attempts to Control Property Taxes Have Failed Indiana has a 70-plus year history of attempts to lower property taxes by raising other taxes. In every case these have failed miserably. The new taxes, or higher rates on old taxes, remain in place. And, in short order, property taxes rise back to their old levels, elevating tax burdens even higher than before.
  25. 26. There may be better plans. It's really a policy question for the General Assembly: do you want to make the trade of something like this in exchange for zero-property-taxes-forever-on-all-property ? Everyone understands &quot;zero.&quot;
  26. 27. Are there practical problems ? Of course. How to make the civil government transition from a property tax base to an income tax base ? Without elaborating, transition can be handled using locator software (Mapquest-type programs). How to handle debt backed by property taxes ? The debt problem might be handled by treating the current state paid PTRC's as in lieu of property taxes (which they are) and paying PT-backed debt service from each unit's own PTRC.
  27. 28. Positive change in Indiana's economy that would follow elimination of property tax: # 1 Heavy real estate investment and increased consumer spending due to increased statewide disposable income. The real estate investment in Indiana alone would cause such an economic boom that it could likely end our foreclosure and abandoned property crisis.
  28. 29. Positive change in Indiana's economy that would follow elimination of property tax: #2 A surge in Indiana's population as more people locate to Indiana to take advantage of real estate purchase opportunities without the burden of property tax. The population surge would drive more sales and income taxes.
  29. 30. Our citizen networks will work to replace all legislators who do not support property tax repeal in the November 2010 election.