Earlier this month, Indiana House and Senate committees delivered bipartisan support for a proposed amendment to the Indiana Constitution that would permanently cap property taxes. And Governor Daniels insisted that slashing the budget for K-12 education was a necessary "last resort" in response to the state budget woes.
It is tempting to criticize these developments. After all, responding to short-term political expediency by locking in property tax caps is the fiscal equivalent of painting ourselves into a corner and burying land mines under all the exit paths. Ask the folks in California how Proposition 13 is working these days.
But, on second thought, perhaps I should get with the times. If constitutional amendments are the flavor of the moment, I would like to propose my own addition to the Indiana Constitution.
My Truth in Hand-Wringing Amendment reads as follows:
Before making any statement on fiscal policy, elected officials in Indiana must include the following disclaimer:
By saying that cutting public education, healthcare for the disabled, or other services is a "last resort," I don't really mean that.
"Responding to short-term political expediency by locking in property tax caps is the fiscal equivalent of painting ourselves into a corner and burying land mines under all the exit paths."
Because there are plenty of other ways to dig out of our financial mess. Like expanding the state's sales tax, which is our top source of revenue, to include more services. A recent report by the Indiana Fiscal Policy Institute shows we are in the bottom 11 of the country in the number of services taxed, and we leave millions on the table by ignoring this growing sector of the economy.
But taxing greens fees or cosmetic surgery or spa services would transfer the fiscal burden to campaign contributors (indicted or otherwise), lobbyists and my fellow public officials. Not a good career move for me, needless to say.
Same goes for instituting a graduated income tax. Again, Indiana is an unusually benevolent haven for folks like the Simons and Irsays, who pay state income tax at the same rate as Hoosiers who work the counter at Cinnabon or clean the bathrooms at Lucas Oil Stadium.
Indiana's flat tax poses a horrible burden on our state finances. But hey, I don't see any mall security guards hosting a fundraiser for me in Geist.
And property taxes. It may seem inconsistent to wail about shrinking revenue in the same press conference where I push for a constitutional amendment handcuffing future generations from raising the money to keep streets safe, schools open, and garbage picked up.
But have you noticed how angry voters get about property taxes? Never mind that taxing an asset like property can be more fair and consistent than income and sales taxes. I am not in the business of speaking hard truths to the public. What do I look like here, Gandhi?
So, when I say, "There is no choice but to cut spending on (fill in name of service(s) that chiefly benefit the poor, the young, the sick, or the otherwise politically powerless)," you know I really mean that there is no other choice that doesn't cause me some serious grief.
Fran Quigley is a visiting professor of law at the Indiana University School of Law-Indianapolis and a staff attorney for Indiana Legal Services. He can be reached at firstname.lastname@example.org.