Wednesday, September 16, 2009

Tax Reform, Tax Increases, & Taxing The Poor

The State’s property tax reform brought much needed relief to a large numbers of Hoosier homeowners, but its been costly to some of the poorest among us, and they’ll get hit again if Noblesville raises taxes via a trash fee.

I’ll skip over the boring details of property tax reform and highlight one result: property owners who can claim a Homestead Tax Exemption (it’s their primary residence) saw their property taxes go down. That helped the regular Joe who owns his home.

But those who own rental property or business property and are not eligible for those 2 tax exemptions saw their property taxes go up substantially. For example, I own two rental properties. Taxes went up on those so much that my rental enterprise went from paying for itself each month and earning a small profit to losing money each month and costing me out of pocket to make up the difference.

Even though some are paying more, in total, reform cost the City of Noblesville $2.9 million in tax revenues for 2010, according to one Noblesville Common Council member who contacted me.

Property tax reform was sheparded through State government by Noblesville’s own Senator, Luke Kenley. And while no doubt Senator Kenley is getting an earful from some county and city leaders, the impact of property tax reform for cities like Noblesville are founded on a pretty solid conservative political philosophy: those with local control should be making more of the taxing and spending decisions for themselves. The State has essentially said, “We’re going to collect less on behalf of cities and as a result, give you less. If you want more services, parks, etc., you raise the money among your population for the things you and they want.”

So Noblesville’s Mayor, John Ditslear is trying to figure out how to provide the same services as before without the pain of serious spending cuts and without going to the community and building concensus for a tax increase. That’s where the tax increase for trash service comes from. They’ve got a budge shortfall and the trash tax is an easy fix. I’m against it, but not out of some jerk-knee reaction against taxes.

To be honest, I get frustrated with my fellow taxpayers. Nothin’ wrong with wanting lower taxes. But taxpayers seem to think that reform means the tax fairies will appear in the night and pave the roads, pay the unemployment benefits, manicure the parks, you name it, and maybe we won’t have to pay so much.

Remember that saying about, “no free lunch?” But at this time, I see holding the line on taxes as a matter of social justice.

As I said earlier, property tax reform hit owners of rental property pretty hard. I’m a Realtor and deal with landlords every day. Those I know are passing on their property tax increases to their tenants through increased rent. So property tax reform has already raised living costs for the lowest income residents in our town. Add a new tax on trash collection and those least able to pay will see their rent go up again, because landlords will pass that on, too, rather than see their investment lose money.

It’s easy to forget that the amount of the monthly tax increase Mayor Ditslear is pushing so hard for could pay the reduced school lunch rates for a lot of low income families.

It’s a matter of social justice.

Most people I know have been tightening their belts, trying to figure out how to do more with less. Some people have lost their jobs, some of lost their homes, and some others are simply afraid either might happen at a moments notice. This is not the time for government to come to folks, especially those least able to pay, and ask for more money. This is the time for government to tighten their built in the exact same way local families have had to.

Three separate Noblesville Common Council members I spoke to listed for me line items of waste still in the budget that haven’t been cut. Some are perks for city employees and others are pet projects. Still, Mayor Ditslear pushes for a tax increase rather than make the hard budget decisions.

Various bits of legislation effecting local governments pushed by Senator Kenley at the state level have a common thread. Many are aimed at making city mayors and county commissioners across the state more accountable to their constituents, making it harder for them to tax or regulate without the consent of voters. But some local leaders have a hard time letting go of old habits.

At a budget meeting last Wednesday, while Mayor Ditslear was in China with Governor Daniels, his assistant, Rusty Bodenhorn and his City attorney, Mike Howard, tried to use a legislative trick to slip the trash tax increase through when we wouldn’t expect it – at last night’s council meeting. The 4 council members on hand refused.

Bodenhorn and Howard work for us. It’s kinda hard to take – knowing they’re getting paid by us while they concoct tricks to raise our taxes in a way we can’t stop.

Which lays bare the dirty side of Noblesville politics. Here, decades of leaders have been used to ramming things down voters throats. The notion of going out into the community and building consensus with taxpayers is treated like a trip to the dentist.

There’s a group trying to put a stop to any talk of a tax increase during this recession. A neighborhood group that started as a crime watch organization for the north side of old town has been circulating a petition to stop Ditslear’s tax increase. For a copy of the petition and instruction on how to use it most effectively, contact Dwight Dickerson at

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