Commentary: Andrew Steele: Taxing and spending are two sides of same coin
By Andrew Steele email@example.com April 30, 2013 11:14AM
Updated: May 2, 2013 1:37PM
There are occasions it’s not fair to judge policymakers on a simple observation of whether a particular policy “worked” or not.
Most of the time, there are multiple motivations, multiple goals, and unforeseen circumstances and events that muddle the clarity of such a judgment.
But when the policy goal is unequivocal, and particularly when the policy itself is punitive in nature, there’s no reason not to pass unequivocal judgment.
So it’s fair to say that the property tax levy freeze imposed by the Indiana General Assembly and Gov. Mitch Daniels was a failure.
If it’s purpose had been to control government spending, it could be said to have had some success. But that explicitly was not its intention. Instead, it was intended to shift a portion of local governments’ revenue source from property to income taxes.
The state gave up on that last week, when levies were unfrozen without implementation of an income tax. In fact, repealing the freeze appears to have had no impact at all on the income tax issue.
That’s largely because property tax caps have minimized the amount of extra money many local governments can collect. Ultimately the levy freeze was a very poor tool for coercing the county to pass an income tax.
The calculation for supporters of an income tax really hasn’t changed either.
Unfreezing the levy isn’t a way to get more money into their governments. But maybe an income tax is.
Meanwhile, their property tax collection rates are so low, initiating income taxation might be the start of a way to get more consistent and predictable revenue.
One of the difficulties in sorting through this issue is the fact that almost no one anymore talks about spending and taxing in terms of “stuff we want to (or have to) pay for” and then “how we’re going to pay for it.” Those are the real issues, but most people tend to focus on one side or the other.
Right now, the “My taxes are too high, therefore there’s fat to cut” argument seems to be holding on. But many income tax supporters look at the revenue situation in their communities, or the county as a whole, and say there can’t be enough fat to cut.
The county’s problem is state-mandated spending and lawsuits, some say, but other expenses can be cut to deal with this problem. But which is it? If there are other cuts to be made, state mandates and lawsuits aren’t the problem — the spending in other areas is.
Letting the levy thaw work through the system might be the best bet for now, but at some point these taxing and spending issues need to start being addressed as two sides of the same coin.
Right now the different sides tend to talk past one another, firmly ensconced in their own perceptions.
Update: I mentioned a few weeks ago that former Crown Point High School principal Eric Ban was one of three finalists for the position of superintendent in the Carmel Clay school system. Since then, one candidate dropped out, and the board has decided the other two aren’t what they want, so they’ve restarted their search.