Blame game under way on property taxes

INDIANAPOLIS – Indianapolis Mayor Bart Peterson recently predicted that skyrocketing property tax increases in Marion County and other parts of Indiana would kick off a blame game.\n"There is one thing I can guarantee you that you're going to see over the next few days and the next few weeks, and that is the ultimate finger-pointing fest," Peterson said in urging Gov. Mitch Daniels to call a special session on property tax relief.\nWell, there are some who are talking about additional ways of softening the blow of what many call a "property tax crisis." The catch phrase has worn thin, since it's spouted almost yearly by so many lawmakers and others.\nLawmakers earmarked $300 million for property tax relief to homeowners this year, to be mailed out in rebate checks after fall tax bills have been sent. The money is to be allocated to all those eligible for homestead tax credits this year.\nDaniels has proposed a couple of twists to speed up the relief and change how it's distributed.\nBut fingers are still wagging at who's to blame for homestead tax increases projected to average 24 percent this year.\nBut a variety of factors are driving up bills.\nIt's also the first year of so-called "trending," a system that's essentially updating the assessed value of residential property for the first time in years.\nDaniels, lawmakers and local officials acknowledge those factors, but the blame game is still on.\nDaniels is largely blaming high property taxes on excessive local spending, including that for costly school building and renovation projects. In a statement last week, he said that his administration would reject upcoming local budget requests exceeding the rate of inflation, which is now about 2.9 percent in the Midwest.\nHe also said pending and future bond issuances would be held up by the state in "problem counties," although he has not defined what problem counties are.\nMatt Greller, executive director of the Indiana Association of Cities and Towns, said the proposed inflation-rate cap on local governments was "really just a \nfinger-pointing exercise."\nIACT says during the past seven years, spending in cities and towns has increased at an average rate of only 2.9 percent, while increases for other local governments ranged on average from 3.57 percent to 4.36 percent.\nGreller said getting rid of the inventory tax, capping state property tax relief credits and deciding to start trending assessments this year were state decisions.\nThen there's the partisan part of the blame game.\nDemocratic House Speaker Patrick Bauer of South Bend said the last two-year budget, approved by a legislature then controlled entirely by Republicans, increased local property taxes dramatically so Republicans could claim they had eliminated the state's \nbudget deficit.\nBauer also notes that all 49 House Republicans now in the minority voted against a new budget approved by a Democrat-controlled House and GOP-ruled Senate – and signed by the Republican governor – that provides $550 million in property tax relief over the next two years.\nThe $300 million in relief this year is projected to reduce a statewide average increase in homeowner tax increases from 24 percent to about 7.7 percent.\nHouse Republicans insisted on $750 million in property tax relief in this new budget, which they say would have held average statewide homestead increases to "the normal 5 percent growth due to \nlocal spending."\nThey held a news conference last week, again blaming House Democrats for not backing more property tax relief even though Republicans who rule the Senate were on the same page as House Democrats.\nBut House Minority Leader Brian Bosma, R-Indianapolis, said his caucus was proposing them not "just for political gain," but because homeowners were hurting and House Republicans were trying to help them.