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STATEHOUSE DISPATCH: Legislators avoiding games as they tackle tax reform

January 28, 2008

People outside the legislative process finally are understanding that there is no perfect solution to the property tax reform dilemma, that it is not a zero-sum game, that there will be winners and losers, and that this is not a Democrat vs. Republican issue.

What they still do not realize is how hard legislators are working to accommodate the legitimate concerns of homeowners, governmental units and schools, businesses, and agricultural interests, and how difficult it is to assemble a package that offers relief to homeowners while still meeting their expectations about service delivery and providing an atmosphere conducive to economic development.

That's why Senate Tax & Fiscal Policy Committee Chairman Luke Kenley, RNoblesville, persuaded Senate colleagues to phase in some of the property tax bill caps, even as the full sales tax hike would be implemented upfront.

The pie-in-the-sky concepts are off the table, and we're back to the nitty-gritty of adults sitting down to slog through just how to make this all work.

In recent days, intensive action on the floor of the House and in Senate committees made it clear total elimination of property taxes will not be considered this session, including removal of property taxes from homesteads, the idea du jour earlier this month that once appeared viable.

This isn't a pretty process, but not for the usual reasons. Typically, political compromise is a must, particularly under split legislative control, and the so-called "special interests" that have a stake in the battle have a strong hand in shaping the final product.

But we discern an unusual change in attitude to date this session. Lawmakers are not impervious to local taxpayer grievances or to the complaints of agricultural, business and manufacturing interests, but they seem far less willing to kowtow to such concerns than they might usually be.

Of course, there were a number of amendments offered in recent days aimed at addressing specific situations in certain counties correcting special problems, but many of those were adopted by broad margins in the full House based on questions of equity and in the interest of improving a given local tax base.

Others were offered in full recognition of the fact that different counties face different situations. Lake County, due to its heavy reliance on a trio of industrial taxpayers, is far different from a rural county with few citizens and not much industry.

And some do reflect different philosophies, such as the House's decision to reduce property tax savings for particularly expensive homes, and to further protect renters and senior citizens.

But generally speaking, solons have almost collectively adopted an attitude that indicates they are more interested in doing the right thing-whatever that might be-than in political preservation.

That might be overstating things, because most of the key tough decisions through this point have been made by legislative leaders-particularly Senate President Pro Tem David Long, R-Fort Wayne, and Kenley-who have protected some of their rank and file by taking certain proposals out of the mix and adding new ones. (Kenley may be the only lawmaker with a real clue currently as to how all the puzzle pieces will fit together when they hit the ground).

What also is striking is how much solid information is lacking. This was evident in the debate on the scores of amendments on the House floor Jan. 23, when the full body reviewed amendments to HB 1001, the governor's basic property tax reform plan.

One lawmaker's off-the-cuff estimate of $2 million for a proposed new statewide computer assessment system was countered by an $80-million-plus figure by another legislator.

As items become more speculative (such as how many school districts might be affected to what extent under which type of proposed referenda conditions), the data becomes even more elusive, forcing lawmakers to rely more on anecdotal information and gut instincts. That doesn't foster good policy-making.

That also becomes more important as the House amendments ratchet up spending, by as much as $350 million, according to GOP estimates.

For now, you're seeing some good legislating, with the basics of the governor's plan forming the foundation, and the details being worked out with more of an eye on reality than politics and pandering.

Relish the moment.



Feigenbaum publishes Indiana Legislative Insight. His column appears weekly while the Indiana General Assembly is in session. He can be reached by e-mail at edf@ingrouponline.com.
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