After writing another lengthy paean (sarcasm alert) a couple weeks ago about property taxes, I planned on putting that horse to bed for a while and getting back to a friendlier version of retirement. However, three things popped up which I cannot let pass …
• The Tax Foundation, a noteworthy think tank in Washington D.C. focused on all things taxes, say they are non-partisan, which I think they are. But they definitely tend to encourage and focus on fiscal responsibility, which unfortunately is not non-partisan. But after typing that, I am not encouraged about that perspective’s continued viability at the national level. But I digress.
I signed up for a weekly email from them a while back. The one that showed up two weeks ago as I was formulating that last lengthy discourse contained 43 charts of updated data: “Facts and Figures 2024: How Does Your State Compare?” Of course, I had to dig into it. How does Indiana compare nationally? And just as important, how do we compare to our neighbors?
If you’d like to see the 43 charts, send me an email and I’ll send you the link. Meanwhile, a few highlights:
— Total State and Local Tax Burden as a Percent of Income. New York leads this category at 15.9%. Michigan has a slightly lower number than Indiana (8.6%), Ohio and Illinois are significantly higher — 10.0% and 12.9% respectively. Indiana’s 9.3% is the 12th lowest in the country.
— State Business Tax Climate. This ranking has been referenced in earlier writings here. Indiana is very competitive, providing the 10th best tax climate for business. But we used to be 9th, which was cited as a concern during the November meeting of the State and Local Tax Review task force that our local State Sen. Travis Holdman is chairing. Michigan is nipping at our heels at 11th place. Ohio and Illinois are way down the list in 36th and 38th place.
In the property tax sub-category of this ranking, Indiana’s property tax climate for business is third best in the country. Which is good except somebody has to pay that freight. Guess who?
— An interesting one: State Gas Taxes (per gallon). No surprise that California leads this race at $0.68 per gallon. Illinois is No. 2 at $0.665; Indiana has the 5th-highest gas tax in the country, $0.517. If you drive much into Ohio, you have surely noticed they almost always have lower prices. They should. Their gas tax per gallon is $0.385 yet their roads seem at least as nice as ours. Alaska is the lowest at just under 9 cents per gallon, but then they don’t have very many roads.
— One more: Property Taxes as a Percent of Owner-Occupied Housing Value. Our research has revealed that despite the increases homeowners have seen in Wells County the last several years, we are doing better in this statistic than our neighboring counties. How does the state rate? The state average of 0.71% (which I find surprising and which also means we are a bit higher than that state average) is the 30th highest in the country, just a few notches below the national average of 0.91%. Illinois is 2nd highest at 1.95%; Ohio and Michigan are well above the Indiana number. New Jersey gets the prize for first at 2.08% while the lowest is somewhat of a surprise. Hawaii property taxes are just 0.26% of assessed values, but — a big but — the value of land and homes there is astronomical.
• A couple of the Indiana gubernatorial candidates are now mentioning property taxes in their TV commercials. They say they can fix it. Just like, I am certain, other candidates have vowed to end government waste.
One is proposing to freeze property taxes for seniors. Sounds good, but it would be a lawsuit waiting to happen. The basic tenet of our property tax system — now enshrined in the state constitution — is that it is market-driven and equitable, the result of a lawsuit about 20 years ago that brought about the assessment process which recognizes that in our current market, homes are selling a lot with higher prices while business real estate is not, resulting in stable assessments.
It is all, of course, much more complicated than the candidate purports. But it sounds good on TV. And it strikes me as not unlike President Biden’s efforts to forgive student loan debt in order to buy some votes.
• And then the latest episode of the aforementioned State and Local Tax Review task force was streamed live from Room 130 of the Indiana Statehouse Wednesday morning. While the interim committee was originally created to look at perhaps eliminating the state income tax, the entire focus of this meeting was on property taxes. It is encouraging to observe that these people are taking this seriously.
“Where there is simplicity, there is accountability,” task force member Rep. Jack Jordan, (R-Nappanee) said. “Where there is complexity, there is no accountability.”
But they also recognize the obstacles.
“We’re not going to solve this is a single session,” House Ways and Means Committee chair Rep. Jeff Thompson (R-Danville) told the group. “But if we’re not making an effort fix this, we’re not doing our job.”
There were other new insights from the session, enough for another paean (sarcasm alert) for another day.
miller@news-banner.com
