Easier said than done (03/05/07)

As usual, it's easier said than done.

It's easy, for example, to call for the reduction of property taxes. Nobody likes to pay taxes in the first place, and with the property tax there's always a suspicion that it may be unfair. Assessments are complicated and subject to argument, and inevitably there are folks whose taxes are entirely unrelated to their ability to pay.

But reducing or doing away with property taxes entirely is far from easy. In fact, as Indiana lawmakers are reminded at regular intervals, it can be a nightmare.

Simply stated, the problem looks like this: Assuming all things stay the same in terms of local government spending, if you reduce tax revenues from one source, you have to make up those revenues from other sources.

Eliminate the property tax, and you'll have to raise income taxes or sales taxes or come up with some other form of tax entirely.

That's tough enough.

But then there's the little matter of practicality.

The reason previous generations of lawmakers relied upon property taxes for local government and a percentage of funding for public schools is that is a relatively stable generator of revenue. It's predictable.

Sure, property values change over time. But they don't fluctuate nearly as widely as incomes or retail sales.

County officials can draft a budget in August which can pretty much accurately reflect revenues for the entire twelve months of the following calendar year.

No other form of taxation - not income taxes, not sales taxes, and certainly not lottery revenues - provides the same sort of predictability.

And therein lies the heart of the puzzle legislators face every single time they sit down to reduce property taxes: If you take money from one source, you need to find a replacement source, and there is no replacement source as predictable as property taxes.

As we said, it's far easier said than done. - J.R.[[In-content Ad]]