State discusses money issues

The state legislature is currently meeting to decide how to handle two pressing issues that could hit Hoosiers where it hurts the most: The wallet. One is the $1.3 billion deficit in the state's budget, which could result in a double-digit tuition increase next year. The second involves a court ordered re-assessment of all property tax bills, which could lead to a massive tax increase for some property owners.\nTo solve these problems, Governor Frank O'Bannon and fellow Democrats have developed a plan to balance the state's budget in a responsible way, spreading the sacrifices evenly. Since education makes up 55 percent of the state's budget, the legislature cannot simply cut spending to solve the budget crunch. It must bring in more revenue. Although no one likes paying taxes, the Democrats have proposed several reasonable tax increases to protect the state's long-term investments. \nFirst, they have proposed raising the cigarette tax 39.5 cents per pack, bringing it to 55 cents. Although this may seem high, it is much lower than the $1.50 tax New York residents will begin paying in July. Raising this tax will prevent some people from smoking and help balance the budget. \nDemocrats have proposed raising the riverboat casino tax from $3 to $5. Gambling has caused a significant number of problems for people throughout this country, not just Hoosiers. \n"In 1998, people gambling in this country lost $50 billion in legal wagering, a figure that has increased every year for over two decades, and often at double-digit rates," according to www.gamblingproblem.com, "And there is no end in sight." \nBesides balancing the budget, this tax will also discourage people from wasting their money on gambling boats.\nThe Democrats' plan also cuts millions of dollars from the state's budget. We have already experienced cuts here at IU, with the physical plant laying off several workers. O'Bannon has imposed a hiring and pay raise freeze for all state employees and he has eliminated 700 positions from the state's payroll. The governor has also cut $250 million from the state's Medicaid fund, which provides health services for the state's low-income residents. Although this may seem like a lot of money to cut from a program that helps the poor, O'Bannon will have to cut a lot more if his balanced budget plan is not implemented.\nBesides balancing the state's budget, the Indiana General Assembly also has the difficult job of sparing homeowners huge property tax increases. In 1998, the Indiana Supreme Court ruled that the way Indiana assessed property taxes was unconstitutional and ordered the state to adopt new rules by June 1, 2001. Under the new rules, which are based on the market value system, property taxes could go up as much as 33 percent. The governor and the Democrats believed that was too much and proposed the 21st century tax plan. The plan will revamp the entire property tax system and cut the amount of tax collected by 20 percent.\nTo offset the cost of reducing property taxes, O'Bannon has proposed raising the sales tax by one cent totalling six cents. This is much more convenient than having property tax bills go up double digits. The sales tax will still be one of the lowest in the nation. \nNobody likes paying taxes, but when faced with the possibility of a double-digit tuition increase and decreasing support for the state's other schools, the legislature should do the right thing and pass the governor's plans.