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EYE ON THE PIE: 'Tis the season for economic foolishness

December 4, 2006

This is the best time of the year. Thanksgiving is over and the signs of Christmas have yet to bore us. All the truly crazy people have identified themselves by shopping on the days immediately following Thanksgiving. New and old ideas are blossoming for consideration by the Indiana General Assembly.

Gov. Mitch Daniels has given us the Commerce Connector, a nifty addition to our highway road map. This would be a new outer loop around Indianapolis, serving Greenfield, Shelbyville, Franklin and Martinsville. Only it would not be a full loop, since its northern and western sides are missing. Noblesville, Carmel, Lebanon and Danville would be excluded. Why? We don't know. The Indiana Department of Transportation is probably studying it, but why doesn't its Web site indicate as much?

As seems to be the pattern, the Governor's Office comes up with intriguing ideas but inadequate information to help the public judge the wisdom of the proposal. Where are the studies that support the Commerce Connector? How can we agree that this is better than a fixed-rail system that the "public transit" advocates seek to relieve congestion? How do we answer the questions raised in Fort Wayne, Terre Haute and Lake County about their favorite road projects?

The governor also announced that Interstate 69 would not be a toll road. No doubt this is a politically popular decision. However, I would prefer all interstate-quality roads be supported by tolls, but I'm not standing for office.

Then there is the often-offered idea of some Democrats that we should eliminate the sales tax on gasoline. Why? To make unnecessary and inefficient driving less costly? To help pollute our cities even more? Where will the funds come from to replace this revenue in the state's coffers? This is just another legislative balloon releasing gas over the Hoosier countryside.

At the same time, the governor wants to increase the tax on cigarettes and use the money to help pay for the insurance of the uninsured. Sounds good, except that we have no means of checking his arithmetic. Is our goal insurance or is it health care for the uninsured poor? Let's stop worrying about the uninsured and start thinking about the underserved.

While we are at it, what happened to our collective guilt concerning the excess consumption of enjoyable, but unhealthful, foods? A higher tax on cigarettes, YES. But let's also have a higher tax on potato chips, fried tenderloins, fried chicken, candy, cookies, ice cream, "biggie drinks" and a host of daily delights. If we want to be serious about such evils, let's not just talk against them, TAX THEM.

Finally, the rightfully aggrieved cities and towns want more tools available to finance local government. They want to be able to use income, sales or other taxes on an optional basis. The program is called Hometown Matters and deserves serious consideration. Except one of the promises in Hometown Matters is that a significant portion of the new revenue would be used for property-tax relief. Indiana does not need property-tax relief.

There is no evidence that our property taxes are too high. In-migration from Illinois in the northwest, from Cincinnati in the southeast, and from Louisville in the south demonstrates that the marketplace shows Indiana housing to be a great buy.

But then what would this silly season be if we did not propagate and perpetuate economic foolishness?



Marcus taught economics more than 30 years at Indiana University and is the former director of IU's Business Research Center. His column appears weekly. To comment on this column, go to IBJ Forum at www.ibj.comor send e-mail to mortonjmarcus@yahoo.com.
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