U.S.
Nov. 23—With a new state administration taking office and Republicans maintaining their supermajorities in both chambers of the Indiana Legislature, there will be a lot of discussions about property taxes.
Those taxes pay for most local government expenditures, including public safety and some costs of providing an education to local children.
In 2010 the state implemented caps on property taxes of 1% on residential property; 2% on farmland; and 3% on businesses.
What that effectively did was cap a residential property owner's tax at 1% of the assessed value following a number of deductions in the taxable amount.
The problem is that over the past 14 years, the values of all properties has increased significantly.
As the value of residential property increases, the amount of taxes owed is also increasing. Of course, the positive side of all this comes about when a property owner decides to sell at a higher value.
During the gubernatorial campaign, all the candidates vowed to provide some form of property tax relief.
Governor-elect Mike Braun, a Republican, proposed rolling back the property tax bill to the 2021 levels, a move that Madison County Auditor Rick Gardner recently said would cost county government $3 million in revenues.
That doesn't include the losses to other units of government in Madison County.
A legislative study committee released a report this week, but there were no clear indications of how Republicans in control of the legislature will address property tax relief.
There was a recommendation that property owners over the age of 65 receive some additional tax relief. That suggestion is commendable, but it would place a further hardship on counties with an aging population, like Madison County.
It was also suggested that local option income taxes could be a means to provide property tax relief.
Increasing local option income taxes would mean that everyone in a particular county earning an income would pay a higher amount to fund local units of government.
There are currently three local option income taxes allowed by the Legislature, and Madison County has all three in place.
Raising local option income tax rates might prove to be the best solution as a way to slow property tax increases.
This week, I also noticed that the price of farm ground in Indiana is increasing at a record rate with the average price of an acre now above $14,000.
Farmers pay property taxes based on an average price of farmland set by the state.
But to expect farmers to pay higher taxes at a time when their revenues are on the decline is not a reasonable solution.