Property tax referendum

What is it?

A proposal for referendums would require a public vote on most government construction projects above a certain dollar amount. The proposal is a response to the public outcry about rising property taxes in Indiana.

 

But look at the numbers.

The statewide average increase in homeowner property tax bills is estimated to be 24 percent. Of that:

  • 10 percent is due to trending from 1999 to 2005 prices.
  • 6 percent is due to local spending increases. Of this, roughly 3 to 4.5 percent is due to school capital improvement expenses.
  • 4 percent is from a shift in the tax burden from businesses to homeowners.
  • 4 percent is due to changes in the homestead credit and the Property Tax Replacement Credit (PTRC).

 

Why it's unnecessary.

Existing checks and balances are sufficient to ensure prudent investments in infrastructure:

  • Projects must be approved by elected officials or elected board.
  • Projects are subject to the remonstrance process.
  • Projects are reviewed by School and Local Property Tax Control Boards and Department of Local Government Finance.
  • Effective Jan. 1, 2009, projects will be subject to the new County Boards of Tax and Capital Projects Review.

 

Careful what you wish for ...

So … what if the proposal passes and referendums become the law? Likely outcomes include:

  • Long delays in capital projects.
  • Higher construction costs, as project timelines become based on the election cycle instead of practical considerations.
  • More Indiana students attending classes in leased trailers.
  • More lease-back scenarios to fund what would have been public works.