Farm Bureau weighs in on property tax reform

From this morning's C-J, Lesley Stedman Weidenbener on the Farm Bureau's plan for property tax relief...

INDIANAPOLIS -- The Indiana Farm Bureau will ask lawmakers to increase individual income- and sales-tax rates by 1 percentage point each and use the revenue to cut property-tax bills for all payers by about 30 percent...

The Farm Bureau's plan calls for the state to increase the sales tax from the current 6 percent to 7 percent and the individual income tax from 3.4 percent to 4.4 percent. That would generate a combined $2.1 billion annually in revenue...

I'm not an expert on the numbers and haven't done the math, but I'd be surprised if these tax increases only cut property taxes by 30%.

Indiana Farm Bureau President Don Villwock announced the organization's property-tax recommendations at the Statehouse yesterday, saying they offer permanent, substantial and fair relief to all property owners.

The group, which represents 80,000 Hoosier farm families, stopped short, however, of advocating the elimination of property taxes now.

"We know that we cannot do away with property taxes altogether in the short term," Villwock said. "I think that it is still a noble long-term goal that we at Farm Bureau will still strive for, but we need immediate relief today and we need it now."

A significant short-term solution is more than Indiana's politicos have come up with so far...

The state would use that money to take over several costs from county government and schools.

Property taxes would no longer fund general school costs -- including those for salaries, utility and insurance expenses. Also, the state would take over the full costs of child welfare and courts from counties.

Some of the new tax revenue would be used to set up rainy day funds for schools. That money would be saved for years when sales and income-tax revenue dropped. Once the funds' balance grew, some of the money could then be used to reduce school debt....

Interesting-- and not the focus of any reform efforts so far (that I know of)...

Villwock said yesterday that the Farm Bureau's plan is meant to help all taxpayers, although the group acknowledged that farmers would likely pay less overall. But he said the plan would make the tax system fairer and easier to understand.

Of course, fairness is in the eyes of the beholder! And I don't see how this would make it any easier to understand. More likely, it would be equally incomprehensible. But people's tax bills would be smaller, so they'd be less likely to complain.

"Property taxes are unfair because they are not based on one's ability to pay," he said.

Huh?