In December 1773, a group of colonists on American soil protested unfair British taxation policies by dumping imported tea off ships and into the sea.  Their actions helped to spur the Revolutionary War that led to our independence from the British.  Now, in July 2007, hundreds of Marion County citizens rally to express their anger against an unjust property tax, bringing on a “Revolutionary Tax War” in Indiana.  For many folks across Indiana, this tax is putting their homes and their freedom on the line.  Homes and freedom: these are two things integrally linked to the American dream, and Indiana citizens are not willing to sacrifice them without a fight. The citizens’ uproar launched throughout the state is calling government officials to act and to think hard about real solutions to this devastating problem facing Hoosiers.  I have never seen the political will greater than it is right now to get this done! 

In nine counties residents have seen their tax bills increase by an average in excess of 35 percent, and in Marion County, an increase of 50 to 200 percent was common.  Personally, our property tax bill increased by about 60 percent—and I felt relieved.  This is insane!  It seems we are dealing not only with a financial issue but also a moral issue.  It has been my long-held belief that the property tax is unjust.  During my time at the Statehouse, this belief has only been strengthened and reinforced by what I see as an ever-escalating problem.

Indiana’s property tax system is unjust because (1) it taxes unrealized gain; (2) it is not an accurate measure of wealth or ability to pay; (3) it is not consistently applied; (4) you can never really “own” your home; and (5) it is unpredictable and a budget cannot be planned to address it. I have long been in favor of the repeal of these taxes and have worked with groups who have the same goal.  However, repealing the property tax system is a daunting task, as funding mechanisms for local government must then come from some other source.  This type of long-term reform will take considerable time and research.  Unfortunately, Hoosier property taxpayers do not have the time to wait for a solution; they need help now.

There are measures that can be taken at either the local or state executive level to provide immediate assistance to those hit hardest.  Included might be such remedies as a homestead credit filing extension, allowing residential property owners to pay last year’s tax bill, or immediate reassessment in counties where there are apparent gross discrepancies. Clearly, refund checks delivered months from now will not help those facing huge increases today. We must work with local governing units so they do not falter. We need to allow these measures, and other tools like the recently filed class action lawsuit, to buy time and assist property owners today.

However, in order to really deal with this problem for future years, we would be wise to use our current property tax crisis to propel an answer to a broader question: What is the most efficient, effective Hoosier-friendly taxing structure that is compatible with a 21st century economy?  I agree with the House Republicans who called for a nonpartisan panel of fiscal tax experts to help to answer this difficult question.  In addition to officials who work directly with our taxing system, we would be well served by including those individuals who know Indiana and taxes.  The third category would be national think tanks who know state taxes from a national perspective, such as The Heritage Foundation, Heartland Institute, and the Cato Institute. These groups know what works in other states, would help keep our thinking open to what might be, ask those tough questions, and do not have a “dog in the race.”  

The process would have to be thoughtful and deliberate, where models are run and communications are robust. 
Many ideas are already being tossed around, such as increasing our reliance on local and county option income taxes.  If that option is pursued, the panel could address the collection and distribution problems that currently exist.  There is no sense in jumping from one broken system into another. 

One thing is certain, beyond the taxing issue: We must also address the spending issue.  Government spending must be controlled at all levels in order to face this crisis effectively and eliminate the possibility of facing this type of crisis again.

I join the citizens of Indiana in their outrage over property tax increases.  People being forced out of their homes because they cannot pay the tax cannot be allowed to happen. We must act…and soon!  Addressing the property tax system will require boldness by government and its citizens.  We have a window of opportunity right now.  Hoosier property taxpayers are proving that they are bold, and elected officials are showing signs of that same boldness.  Let us not lose any of this momentum if we mean to create real change for the state of Indiana.  KEEP THE TEA COMING.