Preserving vital revenues tops legislative priority list for cities and towns
The steady message of Replace Don’t Erase is more important than ever given some of the predictions surrounding residential tax bills. (Getty Images)
I am frequently asked about the number one priority Aim is following during the legislative session. The obvious choice this winter, of course, is property taxes. Specifically, the concerns about how last year’s bump in assessed values will impact this year’s property tax bills and the continuous threats to eliminate or partially eliminate the business personal property tax.
Each of these revenue sources are vitally important to cities and towns and the ability of local leaders to continue providing essential services and investing in the kinds of amenities necessary to maintain and attract a talented workforce.
Leading up to this session, Aim began preparing mayors, council members, clerks, clerk-treasurers, and many appointed officials, of the likelihood that legislation would be considered to reduce both residential property tax and business personal property tax liabilities. It should go without saying, talk of losses to either or both vital revenue streams without a suitable replacement source has been met with universal concern by municipal leaders.
Our steady message of Replace Don’t Erase is more important than ever given some of the predictions surrounding residential tax bills.
Litany of bills
Here is the rub. There are literally hundreds of bills being considered this session that impact municipalities in both large and small ways. To some communities, limiting the ability to grow via municipally initiated annexation could mean the difference between providing necessary infrastructure to a new, large-scale employer and watching them walk away. To others, adding restrictions, fiscal constraints, and bureaucracy relative to TIF could mean stalled or abandoned housing and economic development initiatives.
And without the ability to make appropriate prepayments and deposits, all local units will be unable to operate as efficiently and cost effectively as their private sector competitors, causing long delays and costing taxpayers time and money.
What is the point of this litany? Municipalities are home to more than 70% of Indiana’s population, and thus are the engines of Indiana’s economy. They cannot afford to have tunnel vision. Their focus, and therefore Aim’s focus, must be broad; we must consider the impact each individual piece of legislation will have on municipalities and the collective impact of all bills once each session ends.
Property taxes make up the majority of the revenues used by cities and towns to provide police and fire services, public works functions, parks and recreation facilities and programs, and more. Given the constraints of property tax caps and other levy controls, even the seemingly small losses of these funds could have large-scale consequences. When coupled with the gradual passage of policies that reduce local decision making, limiting the ability of local leaders to maintain and grow thriving communities, it is a concern of even greater proportion.
Certainly, a balance must be struck between municipal and rural, public and private, growth and preservation, and so on. In finding this balance, however, we need to ensure that our state’s collective progress is always in the center of our telescope. Without purposeful attention on nurturing quality places we cannot expect to be an attractive home to our new graduates and prospective Hoosier families.
While the bills with significant revenue or operational consequences get most of the attention, it’s not all doom and gloom. Not in the slightest. As the session progresses, we are seeing unprecedented support for bolstering our state’s public health system. Senate Bill 4 has great potential to positively impact the health and wellness of each and every Hoosier.
The proposal to re-invest $500 million in the state’s innovative and groundbreaking READI program could have a massive, positive impact in every region from north to south. There is more proof with each passing session that lawmakers agree that state and local partnerships only serve to benefit Hoosiers.
A former mayor from Bluffton reminded me on many occasions that lawmakers and their municipal officials represent the same citizens. Therefore, it should not be difficult to come together over matters of shared importance. I’m optimistic that we are headed in the right direction and more and more we are collaborating to ensure our state’s economic engines are well-maintained and can run at the speed necessary to put Indiana in contention against any placemaking rivals.
The key will be a mutual understanding that all of our engines’ parts are critical to Indiana’s ability to flourish. Focusing solely on putting just enough gas in the tank will not do.
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