Skillman Proposals Include Allowing Local Governments Referenda for Raising Property Taxes

Indiana school corporations may seek a referendum to increase property taxes above the state caps.  In Allen County, Southwest Allen Community Schools voters have approved a referendum for increased propety tax revenue.

Earlier today, it was announced that Indiana Lt. Governor Becky Skillman will lead an effort supporting various proposals for local government reform in the legislature.  One of those proposals is to allow counties, cities and towns the option of seeking to exceed property tax caps by getting voter approval in a referendum.

From Eric Bradner's story in the Evansville Courier & Press:

The biggest item on the [Lt. Governor's] list: Allowing cities, counties and towns to place referendums on the ballot asking voters to decide whether to increase property taxes beyond the state’s constitutional caps to boost funding for local units of government.

That’s a new wrinkle in a long discussion about property taxes, which the Daniels administration has focused on lowering. Right now, state law allows only schools to seek referendums for extra cash in excess of the caps.

“There are times when local leaders feel that their hands have been tied by legislative action, and they have little to no local flexibility. So I recommend more fiscal home rule – at least more fiscal flexibility for them,” she said.

[ ... ]

She also called for allowing local governments to transfer money out of their reserve accounts to pay for transportation infrastructure improvements.

[ ... ]

Aaron Smith, the founder of a group called Watchdog Indiana and a strong advocate of the constitutional property tax caps, said while he supports local-option income taxes, he opposes allowing local government units to seek additional tax dollars through referendums.

“I don’t like it. To get the property tax caps in place, the school referendum was part of the bill. And since the schools accounted for the great majority of the property tax spending, that made sense,” he said.

“But to take that referendum idea any further for a tax that is not based on the ability to pay does not make sense when there are ideas available like using income taxes to make up for lost property tax revenue.”