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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowWe’ve written about property taxes a fair amount in this space this year and had no intention of going there again this week. But a column by Ball State University economics professor Michael Hicks in Monday’s Indianapolis Star brought us right back to the topic.
If you haven’t read the column, we encourage you to check it out. The headline—“Why are we lowering Indiana’s one really low tax?”—gives you a hint at its message.
Hicks points out that Indiana is a pretty low-tax state—and that Indiana’s property tax burden is particularly low. Still, he says the places where taxes are higher (think Carmel, for example) are the places where people choose to live. Why? Because those higher taxes pay for better services—better schools, parks, roads, trash pickup and more.
Hicks writes that, in Indiana, “growing counties have a total state and local tax rate that is 34% higher than the counties that have lost population. In those growing counties, the median property tax payment per resident is $456 higher—a whopping 54% higher—than in counties that have lost population.”
Consider those numbers. And this: The state’s 10 fastest-growing counties have an effective state and local tax rate that is 238% higher than the 10 fastest-shrinking counties, Hicks writes. And the people who live in those fast-growing counties have the highest property tax bills, in part because their homes are worth more money.
In other words, Hoosiers are choosing higher taxes—they see them as a cost of living in vibrant communities with top-notch services.
Hicks gets into a lot more detail. He explains the differences between wealth, consumption and income taxes. And he explains where Indiana falls in the ranking on each of them. Truly, the column is worth a read whether or not you agree with Hicks’ conclusions.
We’re highlighting the column because it reinforces our concern that Gov. Mike Braun’s focus on cutting property taxes significantly will reduce funding to local governments in ways that require them to cut programs and services, making them less desirable places to live. We are confident that is not Braun’s intention. He seems to believe that local governments are overspending and can swallow cuts without affecting the people who live in Indiana communities.
We’re not so sure. Of course, we know there is some waste in some local governments. We know fraud exists or that there are programs that have likely outlived their usefulness. But we are worried about taking steps that could impact the quality of life in Indiana communities at the same time the state is competing to attract not only companies but also people to work at them.
“We’re in the people economy,” Indiana Commerce Secretary David Adams said in a Q&A that starts on page 3A. “People can live wherever they want.”
We agree. Let’s make sure Indiana local governments have the resources they need to make their communities the kind of places people want to live.•
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