Community Comment:

Daniels has turned his back on conservative roots

For many years, throughout Republican and Democratic administrations alike, Indiana has been thought of as a conservative state.

This reputation has served Indiana and its residents very well for decades during which the state maintained a strong industrial base, strong and diverse agricultural base, relatively low levels of taxation (regardless of what the bumper stickers and license plates may have said) and a rising standard of living for the overwhelming majority of its residents.

Unfortunately, a dramatic change in the state's economy has facilitated enormous demands in the public sector.

There has evolved an enormous entitlement mentality rampant among not only the state's least fortunate residents, but also businesses, contractors, consultants, bond counsels, educators and others who continue to push and pull elected officials in state and local government for more than their fair share of the public largess.

With this as a backdrop, we are forced to consider Gov. Mitch Daniels' seriously flawed property tax relief proposal.

The plan must seem radical to the average observer not only in the magnitude of the tax increases it inspires, but also in the enormous chances it imposes some of which will require amending the state Constitution.

Democratic Speaker of the House Pat Bauer had kind things to say about Daniels' property tax proposal the weekend before the plan was even announced.

The reaction of his Democratic colleagues has been muted, perhaps because they secretly and overwhelmingly endorse an increase the state's sales tax to 7 percent.

And many must approve of additional changes in the property tax regime that will not pass constitutional muster.

Soon after the announcement of the plan, the Indiana Manufacturers Association weighed in on its Web site, criticizing the plan for a "lack of supporting data" and claiming that the plan merely shifts a portion of the property tax burden from homeowners to nonhomeowners."

The most serious flaw in the plan, according to IMA and others, is the manner in which the governor seeks to "classify" property taxes into residential properties, rental properties and business properties, imposing 1 percent, 2 percent and 3 percent "caps" or "circuit breakers" on their respective properties.

This proposal sets up a situation where industrial and commercial tax rates would be 200 percent higher than those paid by homeowners.

This portion of the plan is in direct violation of Article 10 Section 1 of the Indiana Constitution, which requires that all tax levies be "uniform and equal" inviting a legal challenge from businesses.

In response to the governor's announcement, Republican Sen. Luke Kenley told the Senate Republican caucus that he would seek to hold up the property tax reform portion of the governor's plan seeking to force local units of government to either impose for the first time or raise a 1 percent local option income tax to help make up for the perceived reduction in residential property taxes.

The "carrot" (or club, depending on your frame of reference) Kenley claims he would use would be the withholding of state child welfare payments to local units of government, the very same payments the state would ultimately take sole responsibility for under another portion of the governor's plan.

Another serious constitutional issue in the plan pertains to the transfer to partially appointed county tax boards, powers and authorities over spending and debt priorities currently proscribed in the Constitution to local elected officials.

Of course, township assessors all 1,110 of them would be replaced by 92 appointed county assessors, a home rule issue that could also invite legal action.

While there are other portions of this plan that raise serious statutory and constitutional questions, perhaps the most cogent remark I heard recently was made by Craig Ladwig of the Indiana Policy Review Foundation in a private conversation.

He said "this plan is all about filling the treasury, its not about growing the economy of the state," and he is right.

By refusing to put into place firm and lasting reductions in the spending and borrowing habits of all forms of state and local government, or consulting the taxpayers of this state prior to devising his plan, Daniels has turned his back on his own conservative roots and the political culture of this state.

As the twin beasts of state and local government continue to devour a larger and larger portion of private wealth and income throughout this state, one must ask the following question: Where are all the real conservatives among our state's elected officials?

When will this madness ever end?

David Coker is president of the Vanderburgh County Taxpayers Association