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Tax crisis simmers; state needs new recipe

Bart Peterson calls it a ‘crisis’ and a matter of ‘life or death” for Indiana communities, including Indianapolis. Most Hoosiers apparently agree.
A recent poll sponsored by the Indiana Chamber of Commerce found that 56 percent of Hoosiers think that the state is facing a crisis in regard to rising property taxes. Concerns about property taxes far outpaced Hoosiers’ anxiety about other issues, including education and jobs.
The poll results should be a clear reminder of the issue’s importance to any political leader who thinks that this summer’s furor over property taxes has dissipated.
The public’s concern also should spur state and local leaders to finally hammer out long-term solutions in coming months. Although the push by some politicians to eliminate property taxes is unrealistic given funding needs and the rate by which income and sales taxes would have to increase, the General Assembly can ‘ and should ‘ reduce local governments’ and schools’ dependence on the levy.
One step is for the state to pick up the cost of child welfare, a system that state government now operates but local governments pay for through property taxes. That setup reduces accountability for how money is spent to provide services for children and families. It also places a heavier burden on poor communities, where needs tend to be greater.
Another necessary move is to collapse layers of government. Indiana is one of a few states that still have township government. Merging township offices with county or municipal governments is an efficiency step that is long overdue.
Taxpayers also need an easier system for holding local school boards accountable for decisions on capital projects. School board elections should be moved from the May primary to the general election in November. The remonstrance system, where opponents and supporters of bond issues must mount competing petition drives, is awkward and should be replaced with referendums.
In addition, Gov. Mitch Daniels and the legislature need to shift more of the burden for supporting needed services to income and sales taxes. Both of those levies better reflect residents’ ability to pay for government services. Property taxes, in contrast, often fall hard on Hoosiers with little income, a fact that can force people, especially the elderly, out of homes they purchased long ago.
Was this summer’s talk about a tax crisis overblown? Most Hoosiers don’t think so. Their elected leaders need to listen.
Editor’s note: Some school board elections, including the South Harrison Community School Corp., already are held in November during the general election.