Ed's Address to the Indiana General Assembly on Property Taxes

January 11, 2010

We are engaged here in a critical debate about the future of this state. We face two important issues only one which can be dealt with by today's action. Those two issues are the public's confidence in our tax system and the ability of Indiana government to provide needed services at a reasonable cost. Our vote today can restore our homeowners’ belief that we will not drive them from their homes by imposing unreasonable property taxes. It will take us years to prove that having taken this critical step our local governments, in concert with our state government, will still be able to provide needed services.

I anticipate, as do many of you, that our citizens will vote overwhelmingly to put property tax caps into our Constitution. I do not believe it to be a panacea. However, I do believe that the passage of the referendum will give us a reasonable chance of creating a predictable system of property taxation. And, it is predictability that our voters and homeowners most require. The chances of providing much-needed predictability depends on two things. The first is the strengthening of our system of property tax assessment. For too long it has been too varied, too uneven and has not earned the public's trust. We must work diligently to make sure that our assessors have the tools they need and that they use them wisely. The second requirement for success depends on us. We are moving, albeit slowly and fitfully, to a system in which real property assessments equate with market values. We are already being pressed to deviate from reliance on market values in order to benefit certain property owners. I ask each of you to join with me in resisting this temptation. If we do not, the system of property taxation will come off the rails yet again.

I will suggest that everyone in this room is aware that property tax caps will seriously limit the ability of our local governments provide needed services. I fear that there are two reactions to this reality. Some of my friends on the other side of the aisle seem to believe that every governmental unit in this state is plagued by waste and incompetence. They even seem to doubt the necessity of much of what government does. I implore them not to use property tax caps as a device to conduct a “grand experiment” in starving government. The second reaction to property tax caps I fear is a form of “conservatism” not usually associated with my party. It is

the idea that whatever government we have now is right in all of its details. There is a natural reluctance to tinker with the system that has let each of us be elected to this body. We need to move beyond that and to see whether our current structures function and at what cost. I urge you all to join me in an effort to create government structures in this state that protect our taxpayers but also our people, especially those in need. As Pres. Kennedy said in his inaugural address: “if a free society cannot help the many who are poor, it cannot save the few who are rich.” 

Let me end on a cautionary note. Several years ago the Indiana Gen. assembly undertook full responsibility for the operating costs of our public schools. We are beginning to see how this transfers a great deal of power and responsibility to us in this body and necessarily limits what local school officials can do. The action that we take today will certainly lead to a significant transfer of power from local government to the Statehouse. I react to this with a mixture of fear and hope. Fear that we will ignore our responsibilities and injure our schools and local governments and hope that we will find ways to create an effective efficient government that serves our people. I vote for hope and will work against fear.