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Dems Say Prop Tax Caps a Choice Between Conscience and Reelection

The issue which will dominate discussion during the 2010 legislative session is property taxes – specifically whether to amend their rates into Indiana’s constitution.  It’s an issue broadly popular with Republican legislators who favor smaller government and lower taxes.  But some Democratic lawmakers see the issue as a debate where their vote is a gamble between following their conscience or continuing their political career.

State Representative Peggy Welch (D-Bloomington) is so popular that in the last two elections, she’s run unopposed, even though she says she’s a Democrat in a district which is 60% Republican.  In the last election in which she did have a challenger – in 2002 – she collected almost twice as many votes as her opponent.  So you might assume Welch is in an electorally safe district and could afford to champion a movement opposing constitutional property tax caps, which she voted against two years ago and which she acknowledges are draining the budgets of cities and schools statewide.  But Welch said she’s worried about the consequences of even a low-key vote against the measure.

“The reality if this does come to the floor and you vote against it, there’s the direct mail piece that goes to your home and says ‘X legislator voted against lowering your property taxes – is this someone you can really trust?’,” she said.  “And I can tell you that’s exactly what’ll happen.”

Welch said she’s not sure if she’ll vote against the caps a second time, but she assumes she’ll get the chance in this session, unlike 2009’s.  Last year, House Speaker Pat Bauer (D-South Bend) said he would not bring the issue to a vote, in order to allow more time to study the effects of lower property tax revenue and higher sales taxes on the state.  One of the effects has been that the state has brought in less income than it projected every month for more than a year.

“Maybe the property taxes should not be capped in cases of emergency, when other dollars are not coming into the coffers.  And certainly they’re not right now,” said Rep. Sheila Klinker (D-Lafayette), a former educator. Klinker said she worries what will become of education dollars if the caps are added to the constitution.

“The bottom line is: If you put the caps in the constitution, you will probably be discussing other methodologies of funding education.  Because, as Dr. John Huie has said many times to me – and he was the budget director for Governor [Otis] Bowen for four years, and Governor [Robert] Orr – and he said ‘Just remember Sheila, property taxes are the most reliable and predictable methodology of funding education at all levels.”

But that argument falls on deaf ears when it reaches Marion Republican Eric Turner, who points out the state has taken over school general fund budgets and thus is already moving toward using fewer property tax dollars to fund education.  Turner said a bigger concern is creating more efficiency at the local level, and says he’s heard no dissent from his constituents.

“Absolutely not.  The public believes that all levels of government, including locals and state and federal can operate with less dollars.  Local units of government have to look at themselves and determine if all the things that they’ve been doing in the past are needed into the future,” he said.

Turner suggests saving money by consolidating city and county services, like fire and police, and insists that a time of economic uncertainty is the perfect time to be looking for more efficiencies and smaller government.

Welch said she feels the issue puts her and other lawmakers in a difficult spot – forced to predict what will become of city services, but also forced to vote for their reduction.

“I mean, sometimes you almost want to say ‘Fine, let’s do it the way you want to do it.’  And then  you’re going to come back and blame me, though, in three or four years when you wanted to go to the library on Thursdays, but the library is closed.”

But the issue comes back to 2010’s elections, Klinker said.

“In some situations you have primary contenders and so I really think that the property tax cap issue will be a political issue.”

In the end, those who vote *for* property tax caps have a valuable chip to lay down next November. Those who speak out against them do so at the peril of their office.

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