Our healthy state budget surplus provides some insulation against inflation, at least for the near term. Local governments are more vulnerable to elevated costs lingering into next year.
Here are two ideas covering the two largest sources of (non-school) local revenue: property taxes and local income taxes.
Population belongs on the list of Indiana’s most daunting long-term challenges, alongside education. Sure, our schools need to prepare more Hoosiers for success in the job market, but building our economy also takes more Hoosiers—period.
Indiana’s property tax caps raise the stakes. Increasing property tax rates to make up revenue can simply push more properties to their caps. Because of this, Indiana’s urban counties are already prone to cycles of rate hikes, cap losses and growing financial distress.
If sales taxes continue to fall in tandem with income taxes, the results would be crushing for Indiana; we collect more than half our general fund revenue from sales taxes (the 50-state average is about 31%).