Businesses pay fair share of property tax (01/16/06)

To the editor:

The property tax debate is brewing again at the Indiana Statehouse.

In this election year, the Legislature will be tempted to provide property tax relief to homeowners — likely at the expense of the business community.

Beyond courting votes, there is a perception among some legislators that businesses got a “good deal” from the 2002 tax restructuring and reassessment efforts and now don’t pay their fair share of taxes. That’s completely false.

A recent study by the Minnesota Taxpayers Association shows that Indiana still ranks among the highest states for business property taxes — coming in at eighth for industrial businesses and 16th for commercial businesses. Meanwhile, homeowners’ taxes rank among the lowest third in the nation.

For decades, Hoosier businesses have shouldered a greater share of the tax burden — despite the state Constitution calling for property taxes to be paid on a fair and equal basis. The reassessment partially corrected this imbalance.

Reverting back to a dramatically uneven distribution of tax payments won’t solve the real problem — the problem of local budgets growing by an average of six percent annually, resulting in increased property taxes.

Without these growing local tax levies, residential property taxes during the reassessment would have actually decreased on average instead of increasing.

Therefore, the focus really needs to be on local government efficiency efforts. Measures to curb unnecessary spending and consolidate duplicative, inefficient local units would be a good place to start. Further taxing businesses that provide jobs that help people to own homes would not.

Kevin Brinegar

President, Indiana Chamber

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