2010 Watchdog Indiana Legislative Agenda

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The 2010 Indiana House and Indiana Senate bills listed below have the potential to significantly impact the state and local tax burden of Hoosier working families.

House Joint Resolution 1 Constitutional Amendment: Taxpayer Friendly

STATUS: HJR 1 was passed by the House Ways and Means Committee 21-3 on December 14, 2009; passed by the House 75-23 on January 11, 2010; passed by the Senate Tax and Fiscal Policy Committee 8-2 on January 12, 2010; and passed by the Senate 35-15 on January 19, 2010.

Voters statewide can vote November 2, 2010, to include the property tax caps and homestead deductions protection in the Indiana Constitution.

Senate Joint Resolution 1 Constitutional Amendment: Taxpayer Friendly

STATUS: SJR 1 was passed by the Senate Tax and Fiscal Policy Committee 9-3 on December 8, 2009, and passed by the Senate 35-15 on January 12, 2010. [Note: Further action was not needed on Senate Joint Resolution 1 because of the action that was taken on House Joint Resolution 1.]

House Bill 1001 Lobbyists and Campaign Contributions: Taxpayer Friendly

STATUS: HB 1001 was passed by the House Rules and Legislative Procedures Committee 9-0 on December 16, 2009; passed by the House 97-2 on January 11, 2010; passed by the Senate Rules and Legislative Procedure Committee 11-0 on February 15, 2010; and passed by the Senate 50-0 on February 25, 2010. The House concurred in the Senate amendments 97-0 on March 2, 2010.

HB 1001 contains the 21 Taxpayer Friendly government ethics reform provisions listed below.

Special note should be made of the HB 1001 provision that keeps legislators from becoming a lobbyist or legislative liaison before a year goes by after leaving the General Assembly. The public good is NOT served if a public servant is using his or her current government influence as part of a lobbyist job application.

Special note should also be made of the HB 1001 provision that requires legislative liaisons of state agencies and state educational institutions to report certain expenditures. State agencies and state educational institutions obviously make a concerted effort to influence state government outcomes, and their lobbying efforts should be as transparent as possible.

It is hoped that the legislative gift reports that include the lowered $50 minimum reportable amount will not only be made accessible on the Internet, but will also be included in a searchable online database that is easy to use.

I attended a recent Legislative Breakfast where a State Senator lamented that Final Four tickets provided by a lobbyist were recorded as a gift even though the Senator paid face value for the tickets. The Senator did not seem to appreciate that ordinary citizens usually have to go through a lottery to get Final Four tickets at face value – and that the lobbyist had probably wheedled ready access to the Senator by making the Final Four tickets easily available.

One wonders how many other General Assembly members have similar ethical blind spots – how many other General Assembly members incorrectly see lobbyist gifts as a deserved perk that has no legislative consequence. A legislator is susceptible to corrupting influence if he or she feels entitled to lobbyist gifts. The way to combat this insidious interference with good public service is to do what Florida has done – eliminate lobbyist gifts entirely.

In conclusion, the improved ethics provisions in HB 1001 are Taxpayer Friendly because they would limit and make more transparent the actions of lobbyists and legislative liaisons to improperly affect state government outcomes. 

Taxpayer Friendly Government Ethics Reform Provisions
House Bill 1001

1. After December 31, 2011, a legislator must wait 365 days after leaving the General Assembly before becoming a lobbyist or legislative liaison.

2. Individuals who are candidates for election to the General Assembly in 2010 may not become a lobbyist or legislative liaison before June 1, 2011.

3. The minimum reportable amount for the total daily gifts given by a registered lobbyist to a legislative person is reduced from $100 to $50.

4. Gifts include purchases from the business of a legislative person.

5. A 'legislative person" is defined as a General Assembly member, candidate, officer, employee, paid consultant, or agency.

6. The "legislative person" definition also includes an immediate family member of a General Assembly member, candidate, officer, or employee.

7. The calendar year threshold of lobbyist expenses that must be reported is reduced from $500 to $250.

8. A lobbyist may not make an expenditure of more than $50 unless the lobbyist receives the approval of the legislative person beforehand after informing the legislative person of the expenditure cost.

9. A lobbyist's expenditure report must include expenses for a function or activity to which all or any of the members of the General Assembly are invited.

10. Rules are established for reporting an expenditure made by more than one lobbyist, the reporting of expenditures with respect to a particular legislative person, and allocation of expenditures made with respect to several legislative persons.

11. A lobbyist may not pay expenses for out-of-state travel for a legislative person with exceptions for (a) "public policy meetings" approved by the Speaker of the House of Representatives or the President Pro Tempore of the Senate or (b) if the expenses are associated with the legislative person's service as an officer, member of the board of directors, employee, or independent contractor of the person paying the expenses.

12. Legislative liaisons of agencies in the executive branch of state government and of state educational institutions must report certain expenditures annually to the Indiana Lobby Registration Commission (ILRC).

13. The ILRC is required to prepare, publish, index, and make available on the Internet all gift reports, statements, and filed documents.

14. The ILRC must make available on the Internet all manuals, indices, summaries, and other documents the Commission is required to compile, publish, or maintain.

15. "Conflict of interest" is defined for lobbyists, and lobbyists must file with the ILRC a description of the procedure that will be utilized if conflicts arise.

16. Elected state officers and candidates for state office may not solicit campaign contributions, accept campaign contributions, and conduct other fundraising activities during the long session of the General Assembly beginning in January.

17. The circuit court clerk must provide copies of legislative candidacy documents from the Election Division's or the Secretary of State's website to a person requesting to see these documents.

18. The daily penalty for failure to file lobbyist registration statements and activity reports is increased from $10 per day to $100 per day.

19. The maximum penalty for failure to file lobbyist registration statements and activity reports is increased from $100 to $4,500.

20. Legislators may not accept honoraria for appearances or speeches, but may accept payment or reimbursement of travel expenses.

21. A state elected official may not use the official's name or likeness in an audio, video, or newspaper publication paid for entirely or in part with appropriations made by the General Assembly.

House Bill 1004 Property Taxes: Taxpayer Friendly

STATUS: An amended HB 1004 1 was passed by the House Ways and Means Committee 20-4 on December 14, 2009; passed by the House 82-13 on January 12, 2010; and referred to the Senate Tax and Fiscal Policy Committee where it did not receive a hearing.

House Bill 1004 is Taxpayer Friendly for the reasons listed next.

1. An additional circuit breaker credit would be granted to real property taxpayers beginning 2011 if the annual growth in net tax bills would otherwise exceed the previous year's growth in the U.S. Department of Labor Consumer Price Index for All Urban Consumers.

Real property tax increases that result from a zoning change, property improvement, or assessed value error correction are not eligible for the CPI-based growth cap. The portion of a tax bill devoted to a referendum-approved levy is not subject to the CPI-based growth cap. Tax bills for properties that have changed title (other than for death of a spouse or other co-owner, or in a case of divorce) would not be subject to the CPI-based growth cap in the year that title is passed - for these properties, the tax in the year that title passes becomes the new base for future CPI-based growth cap calculations. In the case of an abatement that existed before 2010, property taxes attributable to the expiring portion of an abatement would not be limited by the CPI-based growth cap.

Taxing units can petition the Distressed Units Appeal Board for relief from the CPI-based growth cap. Relief, if granted, will consist of changing the factor applied to the previous year’s property tax bill from the CPI growth factor to another factor. This type of relief will allow property tax bills to increase beyond the CPI rate and will reduce the loss to the affected taxing unit. Instead of getting relief from increased property taxes (which are not based on the ability to pay), taxing units IF NECESSARY should have to resort to the variable local option income taxes in the Jeff Thompson Property Tax Replacement Plan (HB 1149 - which needs to be heard this year in the Ways and Means Committee).

The first adjustment under HB 1004 will be effective for taxes payable in 2015 after the 2013 general reassessment. Adjustments will follow for taxes payable in all odd-numbered years without a general reassessment. The basis for each taxpayer’s circuit breaker amount from the 1% - 2% - 3% property tax caps will not change in the years where trending adjustments are not made, meaning that the circuit breaker caps will not change. In areas where the circuit breaker has been triggered, this would result in additional savings for taxpayers and additional losses for taxing units. Also, local expenditures for "trending" will be reduced under HB 1004.

The base value per acre of farmland is $1,250 for taxes payable in 2010, and is currently estimated at $1,400 for 2011, $1,690 for 2012, and $1,650 for 2013. Under HB 1004, the base rate will be $1,400 for 2011 (no change), $1,600 for 2012, and $1,520 for 2013.

The reduction in the farmland base will result in a smaller tax base than under current law. The LSA estimates this will increase the statewide average property tax rate per $100 of assessed value by $0.0092 in 2012 and $0.0126 in 2013.

The LSA is remiss in failing to estimate how much the increased property tax rate will increase the homestead net tax levy. The 2009 Tax Handbook estimates that the Pay 2009 statewide average gross property tax rate will be $2.2200. The 2013 estimated increase of $0.0126 in the statewide average property tax rate is 0.56% of the estimated 2009 statewide average gross property tax rate of $2.2200. Assuming a $1.91 billion statewide homestead net tax levy in 2013, the 0.56% increase in the 2013 statewide average property tax rate from HB 1004 equates to a $10.7 million increase in the 2013 statewide homestead net tax levy. The 2013 statewide net homestead property tax decrease of $38.2 million from the CPI-based growth cap will offset the $10.7 million increase in the 2013 statewide homestead net tax levy caused by the change in farmland assessment.

In conclusion,  HB 1004 is Taxpayer Friendly. Working farm families should be particularly happy with the reduced property tax outcomes that HB 1004 would provide.

House Bill 1030 Local Government Issues: Taxpayer Friendly

STATUS: HB 1030 was passed by the House Government and Regulatory Reform Committee 8-0 on January 12, 2010; passed by the House 97-0 on January 19, 2010; passed by the Senate Local Government Committee 9-0 on February 10, 2010; and passed by the Senate 30-20 on February 25, 2010. The House filed and adopted a dissent on February 25, 2010.

Watchdog Indiana Position on the Final HB 1030 Version

The HB 1030 provisions are Taxpayer Friendly that prohibit employees of a political subdivision who assume an elected office after June 30, 2010, from serving as elected executive, legislative, or fiscal officials within the same political subdivision. The prohibition does not apply to an employee of a political subdivision who holds elective office on June 30, 2010, as long as the individual continues to hold or be reelected to that office. It is a clear conflict of interest for public employees to benefit from their actions as elected officials. Also, the chain of command and procedures for discipline are upheld when employees of a political subdivision do not serve as elected policymakers for that political subdivision.

The following Taxpayer Friendly provisions of HB 1030 will control local government nepotism: (1) a relative of an officer or employee of a political subdivision is prohibited from being employed after June 30, 2010, by the political subdivision in a position that would put the relative in a direct supervisory or subordinate relationship; (2) an employee of a political subdivision is not required to be terminated or reassigned from any position held by that individual before July 1, 2010, but this grandfathering provision expires January 1, 2015.

The Taxpayer Friendly HB 1030 provisions moving all school board member elections to the November general election will likely increase voter turnout. Moving municipal elections to even-numbered years after December 31, 2011, is also Taxpayer Friendly because election costs will be less and voter turnout is likely to increase.

It is Taxpayer Friendly that HB 1030 includes the following Marion County provisions: (1) a building authority must submit its operating and maintenance budget and tax levy to the city-county council for approval, (2) the nine township constables and any full-time deputies they employ must file an annual statement of economic interests with the commission on judicial qualifications.

Most of the HB 1030 provisions establishing the use of vote centers as an option for all counties are Taxpayer Friendly because the resulting overall reduction in the number of polling places will reduce the cost of elections by requiring fewer poll workers. However, the printing of poll books should be phased out at vote centers only after electronic poll lists are found to be reliable during a couple of election cycles.

Finally, the HB 1030 provisions are modestly Taxpayer Friendly that allow the county legislative body in counties other than Marion County to adopt by unanimous vote an ordinance that replaces the board of county commissioners with a single elected county chief executive officer and empowers the county council to exercise both the county’s legislative and fiscal powers and duties.

Some Hoosiers earnestly believe the three-headed boards of county commissioners should be replaced with a single elected county chief executive officer to provide county government with a streamlined executive structure that will be more responsive to citizens and can more readily take the definitive actions necessary in today’s complex world. Other Hoosiers are adamant that a single "county king" will create an atmosphere where fiscal abuse to the point of corruption is more likely.

Some Hoosiers earnestly believe establishing the county council as the single legislative body for county government will be better understood by citizens and businesses and minimize buck passing. Other Hoosiers are adamant that continuing to divide legislative powers and duties between the board of commissioners and county council provides a vital balance of power.

To best resolve these conflicting opinions, a statewide referendum should be placed on the November 2010 general election ballot in each county on whether to replace the board of county commissioners with a single elected county chief executive officer and establish the county council as the county’s only legislative body. Voters should be able to exercise their collective wisdom to decide the fate of their county commissioners in the same way they decide if the members of this Committee are sufficiently good public servants to justify election to the General Assembly.

In conclusion, HB 1030 is Taxpayer Friendly because of the following provisions:

(1) employees of a political subdivision are prohibited from serving as elected officials within the same political subdivision,

(2) local government nepotism is controlled,

(3) all school board member elections are moved to the November general election and municipal elections are moved to even-numbered years,

(4) there is building authority budget oversight and constable economic interests filing in Marion County,

(5) the use of vote centers is established as an option for all counties.

House Bill 1075 Public Access Improvements: Taxpayer Friendly

STATUS: HB 1075 was passed by the House Government and Regulatory Reform Committee 7-0 on January 12, 2010; passed by the House 97-0 on January 19, 2010; and referred to the Senate Commerce, Public Policy & Interstate Cooperation Committee where it did not receive a hearing.

The public access improvements in House Bill 1075 are Taxpayer Friendly for the reasons listed next.

1. The court may impose a civil penalty of not more than $100 for the first violation and not more than $500 for any additional violations against an officer of a public agency, an individual employed in a management level position with a public agency, or the public agency if any officer or management-level employee of that agency knowingly and intentionally (a) fails to give proper notice of a regular meeting, special meeting, or executive session; (b) takes final action outside a regular meeting or special meeting; (c) participates in a secret ballot during a meeting; (d) discusses in an executive session subjects not eligible for an executive session; (e) fails to prepare a memorandum of a meeting required by IC 5-14-1.5-4; (f) participates in at least one gathering of a series of gatherings under IC 5-14-1.5-3.1; (g) denies or interferes with a person's request for inspection or copying of a public record if the record is subject to disclosure by law; and (h) charges a copying fee that exceeds the amount permitted.

2. A public agency is required to allow inspection or copying, or make copies, of a public record within a reasonable time after the request is received by the agency.

3. A public agency has the discretion whether to disclose a public record requested by an offender containing personal information relating to a judge, law enforcement officer, or family member of a judge or law enforcement officer.

4. If a local government agency has the capacity to send electronic mail, the agency must provide notice to anyone (other than news media) that makes an annual request for notice by transmitting the notice by electronic mail or posting the notice on the agency's Internet web site (if the agency has an Internet web site).

5. If a formal complaint is filed, the Public Access Counselor must review public records in camera without redaction (excluding redacted information that is the work product of an attorney and records that the agency is prohibited by law from disclosing) to determine whether the redaction of the records violated the access to public records act.

6. An Education Fund for a program administered by the Public Access Counselor is created to train public officials and educate the public on the rights of the public and the responsibilities of public agencies under the public access laws.

The importance of civil penalties to enforce the public records laws is emphasized by the following comments in an E-mail that I received on January 5:

"I am a senior citizen and live in a small town, I attend town board meetings and record them. Because of my objections to some of the things they do, I have been discriminated against, denied access to public information, pushed to the ground, threatened, and kicked my dog, had three frivolous restraining order placed against me. The first one went to court and I won, so they dropped the other two."

The efforts of this citizen to be actively involved with his local government may be eased a bit when it comes to access to public information if the civil penalties in HB 1075 are implemented. His town officials will probably be less reluctant to knowingly and intentionally deny access to public records if they are subject to civil penalties.

Access to information is the lifeblood for any citizen who wants to be actively involved with influencing the outcomes of his governments. HB 1075 is Taxpayer Friendly because it improves access to public information.

House Bill 1086 Tax and Expenditure Administration: Taxpayer Friendly

STATUS: HB 1086 was passed by the House Rules and Legislative Procedures Committee 10-0 on January 25, 2010; passed the House 97-1 on February 2, 2010; passed by the Senate Tax and Fiscal Policy Committee 10-0 on February 16, 2010; passed the Senate 50-0 on February 25, 2010; and sent to a Conference Committee. The Conference Committee Report was passed by the Senate 50-0 on March 13, 2010, and passed by the House 89-7 on March 13, 2010.

Watchdog Indiana Conference Committee Report Position

The HB 1086 Conference Committee Report includes the Taxpayer Friendly provisions listed next.

1. First and foremost, the following Constitutional Amendment ballot language is simply splendid in every regard:

PUBLIC QUESTION #1

SHALL PROPERTY TAXES BE LIMITED FOR ALL CLASSES OF PROPERTY by amending the Constitution of the State of Indiana to do the following:

    (1) limit a taxpayer's annual property tax bill to the following percentages of gross assessed value:
        (A) 1% for an owner-occupied primary residence (homestead);
        (B) 2% for residential property, other than an owner-occupied primary residence, including apartments;
        (C) 2% for agricultural land;
        (D) 3% for other real property; and
        (E) 3% for personal property.

        The above percentages exclude any property taxes imposed after being approved by the voters in a referendum.

    (2) Specify that the General Assembly may grant a property tax exemption in the form of a deduction or credit and exempt a mobile home used as a primary residence to the same extent as real property?

2. Any surplus revenue remaining after LOIT property tax replacement is paid must be used for property tax replacement in subsequent years.

3. The Department of Local Government Finance will be required to review a county Assessor’s land values if the lesser of 100 real property owners or 5% of the real property owners in the county file a petition not later than 45 days after the notice of values is provided.

4. A county Assessor may request that an employee of the Indiana Board of Tax Review assist in voluntary dispute resolution in a case where the county Property Tax Assessment Board of Appeals has not given notice of a decision on a taxpayer appeal.

5. The Indiana Board of Tax Review must provide appeal filing guidance to property taxpayers.

6. The Department of Local Government Finance must review and make recommendations concerning the language of proposed referendum questions on controlled projects. This will help ensure that the ballot description of controlled projects is accurate and unbiased.

7. The HB 1086 provision that changes the definition of "homestead" to include a deck, patio, gazebo, and residential yard structure (other than a swimming pool) ATTACHED to the dwelling will reduce net homestead property taxes in those few counties that do not already consider these "attached" improvements as part of the dwelling. However, to make the homestead definition more sensible, the phrase "attached to the dwelling" should be deleted and replaced with legal language to include all non-commercial real and personal property improvements within not more than one acre of real estate immediately surrounding an individual’s principal place of residence. Any decisions about the configuration of the homestead acre should be left to the discretion of the homeowner. These homestead definition improvements would properly identify structures such as detached storage buildings and woodshops as part of a homestead.

House Bill 1149 Property Tax Replacement Plan: Taxpayer Friendly

STATUS: HB 1149 was referred to the House Ways and Means Committee where it did not receive a hearing.

The Property Tax Replacement Plan provides all local taxing units with two new Local Option Income Taxes – the Property Tax Replacement LOIT and the Property Tax Cap LOIT. Both LOITs are a variable tax on the adjusted gross income of individuals that may be imposed or removed by any of the more than 2,400 local taxing units.

The Property Tax Replacement LOIT provides an alternate source of tax revenue to a local taxing unit that replaces the property tax revenue from all real property wholly owned by all homeowners, many small businesses, and most farms within the local taxing area. C-corporations and public utilities will continue to pay real property taxes, and personal property taxes will continue unchanged.

The Property Tax Cap LOIT provides an alternate source of tax revenue to replace the property tax revenue lost from property tax caps. The Property Tax Cap LOIT is important because it is not imposed county-wide, but is imposed within local taxing areas. County taxpayers in low-tax areas would not be adversely affected if a high-tax local taxing unit imposes a Property Tax Cap LOIT.

Finally, the Property Tax Replacement Plan eliminates the Distressed Unit Appeals Board. The Distressed Unit Appeals Board has the potential to drive the property tax burden of all taxpayer classes up to the 1% - 2% - 3% cap limits.

House Bill 1181 Township Trustee and Board Referendum: Taxpayer Friendly

STATUS: HB 1181 was passed by the House Government and Regulatory Reform Committee 11-0 on January 11, 2010; passed by the House 54-44 on January 14, 2010; passed by the Senate Local Government Committee 6-4 on February 17, 2010; passed by the Senate 29-21 on February 23, 2010; and sent to a Conference Committee where a Conference Committee Report could not be agreed to.

Watchdog Indiana Conference Committee Position

Senate Bill 240 is a companion bill to House Bill 1181. Listed below are the combined Taxpayer Friendly township government provisions in HB 1181 and SB 240. A combined HB 1181 and SB 240 would be Taxpayer Friendly for several reasons.

Eliminating township government and moving its powers and duties to county government will make the delivery of township services more consistent and professional.

In some cases, the consolidation of fire protection services will result in tax savings.

The county fiscal body or township board, and the Department of Local Government Finance, must consider the ending balance for a township fund when setting budgets, rates, and levies. Township governments statewide have $119.2 million in operating balances, excluding cumulative and capital projects funds, that exceed 10% of annual budgeted spending. It is hoped that strengthened oversight will result in unneeded balances being used to actually help deliver needed services, thereby reducing property tax rates.

Having the county exercise the executive, legislative, and fiscal powers of township trustees and boards can be expected to result in township service delivery decisions that are not unduly influenced by any whims of township trustees.

Nepotism in township government will be controlled.

The State Board of Accounts is required to annually prepare a more comprehensive township report for the preceding calendar year. This will help to identify and correct poor fiscal practices.

Many Hoosiers have strong opinions – both pro and con - regarding township government. These strong opinions exist because township government is part of out political DNA. One early reference to our township government dates back 215 years to the 1795 Maxwell Code of the Northwest Territory. The county justices of the common pleas appointed annually for each township two overseers of the poor, who levied the poor tax, built or rented a poor house, dispensed the public charity, and found homes or employment for orphans.

It is not right for any past or present elected representative, judge, or committee to support elimination of township government without the consent of their fellow Hoosiers. The proposed statewide referendum on the November 2010 ballot in each township on whether to retain the township trustee and township board is an excellent decision-making tool. Voters should be able to exercise their collective wisdom to decide the fate of their long-standing township governments in the same way they decide if candidates are sufficiently good public servants to justify election to the General Assembly.

Some contend that letting the voters in each township decide whether or not to keep their township government will result in a patchwork quilt of different local governments within and between counties. This is really not a problem because we already have at least 159 years of legal precedence in the operation of our county and township governments.

The township government referenda have an added benefit in that the decision on the effectiveness of township government will be taken out of the hands of politicians and made objectively by the voters. It has been amply demonstrated that General Assembly members are reluctant to eliminate the position of township trustee because of local political considerations. In short, let the voters themselves decide the question whether or not township government is good because it is closest to the people.

In conclusion, a bill should be passed out of the Conference Committee that combines the Taxpayer Friendly township government provisions in HB 1181 and SB 240. In particular, allow the voters in each township decide the fate of their long-standing township governments.

Combined Taxpayer Friendly Township Government Provisions
House Bill 1181 and Senate Bill

1. (HB 1181) A public question is placed on the November 2010 general election ballot in each township regarding whether the voters want to retain a township trustee and township board.

2. (HB 1181) If a majority of voters in a township do not approve the public question, the powers and duties of the trustee and township board are transferred to the county on January 1, 2012 as follows:

1. the county executive has the powers and duties of the township trustee;
2. the county legislative body has the legislative powers and duties of the township board;
3. the county fiscal body has the fiscal powers and duties of the township board;
4. the township's assets, property, equipment, personnel, records, rights, contracts, and indebtedness are transferred;
5. the property tax rates, property tax levies, and budget of the township must be separately calculated and administered by the county for statutory purposes;
6. any indebtedness and any lease rental obligation incurred before January 1, 2012, by the township become an obligation of the county in which the township is located, and the county may levy property taxes to pay the indebtedness or lease rental obligations only in the area of the township;
7. if the county’s assumption of all or part of the township’s debt will exceed the county’s debt limit, a special taxing unit must be established to levy property taxes to pay the debt that cannot be assumed by the county;
8. the township is not permitted to enter into a contract that extends beyond December 31, 2011, unless it is approved by the county fiscal body;
9. the county is responsible for providing fire protection in the township and for administering the township fire department;
10. the powers and duties of any township volunteer fire department and fire protection territory are transferred to the county;
11. township firefighter and police officer pension fund boards will dissolve on and the powers, duties, and responsibilities will transfer to the county board;
12. township firefighting funds and firefighting cumulative funds will be administered by the county;
13. if the township is in Marion County and has not already consolidated its fire department, the township fire department is consolidated with the fire department of the consolidated city;
14. if the township is in Marion County, the responsibilities of the township small claims court are transferred to the mayor of the consolidated city, the city-county council of the consolidated city (including the setting and paying judge and court clerk salaries), and the clerk of the circuit court of the county containing the consolidated city;
15. any school township is required to reorganize not later than July 1, 2011, and the governing body of the school township must hold public hearings to discuss the methods of reorganization;
16. the county executive appoints and supervises a township assistance administrator with the same township assistance powers, standards, and requirements as a township trustee;
17. the county fiscal body adopts a uniform property tax rate throughout the township to meet the estimated cost of township assistance;
18. a township assistance fund is established where money in the fund at the end of the year does not revert to the county general fund and earnings of the fund will be deposited in the fund;
19. the duties concerning destruction of detrimental plants and the costs incurred transfer to the county;
20. the county is responsible for administering township cemetery laws;
21. the county is conferred and imposed with the powers and duties concerning any township parks and recreation;
22. the county assumes the township responsibilities for partition fences;
23. township emergency medical services are transferred to the county;
24. any responsibility and obligations (including library board appointments) for public libraries, library districts, or a contract for library services is assumed by the county;
25. the powers and duties concerning the cumulative township vehicle and building fund transfers to the county;
26. shares of state or local taxes that are distributed to the township will be transferred to the county.

3. (SB 240) A relative of a township officer or employee is prohibited from being employed by the township in a position in which the relative would have a direct supervisory or subordinate relationship with the officer or employee. [Note: Relatives hired before July 1, 2010, can remain employed until January 1, 2015.] [Note: The definition of relative does NOT include (a) an individual who is a contractor or employed by a contractor for the design or construction of a public works project, (b) an individual who is a vendor or employed by a vendor for a purchase of mowing services or property maintenance services, and (c) an individual who is a member of a paid fire department or a volunteer fire department that renders fire protection services to the township.]

4. (SB 240) A township is prohibited from entering into a contract or renewing a contract with (a) an individual to provide goods or services to the township if the individual is a relative of the township trustee or (b) a business entity to provide goods or services if a relative of the township trustee has an ownership interest in the business entity.

5. (SB 240) When formulating an annual budget, a township or county fiscal body, must consider the ending balance that will remain in each township fund when setting budgets, rates, and levies relative to (a) the budgeted expenditures from the fund, (b) the fund balance that must be maintained by the township due to delayed property tax collections, and (c) the amount of tax anticipation notes or warrants or other obligations incurred by the township due to delayed property tax billings, collections, or distributions.

6. (SB 240) If the township board or the county fiscal body determines that the ending balance in a township fund is excessive, the excessive amount must be transferred to the township's levy excess fund (which may be used for any lawful purpose included in the township's budget).

7. (SB 240) The Department of Local Government Finance must consider the following issues when reviewing a township's budget, tax rate, tax levy, and appeals: (a) the budgeted expenditures from the fund, (b) the fund balance that must be maintained by the township due to delayed property tax collections, (c) the amount of tax anticipation notes or warrants or other obligations incurred by the township due to delayed property tax collections, (d) whether the ending balance in the fund is excessive.

8. (SB 240) For township budgets adopted for 2011, 2012, and 2013, the total amount appropriated by a township board for a particular year may not exceed the result of the total amount appropriated by the township board for the previous year multiplied by the assessed value growth quotient applicable to the township for the particular year.

9. (SB 240) If a township board determines after a public hearing in 2011, 2012, and 2013 that the township cannot carry out its governmental functions for a year under the assessed value growth quotient limitations, the township board, after approval by the township executive, may appeal to the Department of Local Government Finance for relief from the limitations for the year.

10. (SB 240) The State Board of Accounts is required to annually prepare a report for the preceding calendar year that includes the following: (a) population of the township, (b) budget, (c) property tax levels (d) and property tax rates, (e) assessed valuation, (f) balance in each township fund, (g) summary of township assistance information, (h) summary of any statutory compliance issues or exceptions, (i) description of any interlocal agreements, (j) description of any resolutions or petitions concerning the township, (k) description of the property owned or leased by the township.

11. (SB 240) Each township office must include the address, phone number, and regular office hours (if any) of the township office in at least one local telephone directory.

12. (SB 240) A public meeting or a public hearing of a township official or governing body may not be held in a private residence.

13. (SB 240) A township trustee's annual report must list separately each expenditure that is made to reimburse the township trustee for the use of real and personal property for public business, including any reimbursements made for the use of a private residence, personal telephone, or personal vehicle for public business.

14. (SB 240) If a township reorganizes with at least one other township after December 31, 2012, and the resulting new political subdivision is not a city or town, the county fiscal body is the fiscal body of the new political subdivision.

House Bill 1367 K-12 Education Matters: Taxpayer Friendly

STATUS: HB 1367 was passed by the House Education Committee 6-5 on January 25, 2010; passed by the House 51-48 on February 2, 2010; passed by the Senate Rules and Legislative Procedure Committee 8-3 on February 15, 2010; passed by the Senate 31-19 on February 23, 2010; and sent to a Conference Committee. The Conference Committee Report was passed by the House 97-0 on March 13, 2010, and passed by the Senate 50-0 on March 13, 2010.

Watchdog Indiana Position on the Conference Committee Report

The HB 1367 Conference Committee Report includes the Taxpayer Friendly K-12 education provisions listed next.

1. School corporations must take the actions necessary and desirable to preserve and protect instructional programs, including class sizes, curriculum or program offerings.

2. A school corporation may adopt a resolution to transfer money during the 2010-2011 school year to one or more of its funds for the purposes of the funds from any of its funds other than a debt service fund or a racial balance fund. The transferred money must be used to preserve and protect instructional programs. The total amount that may be transferred under may not exceed an amount equal to (1) five percent of the school corporation's capital projects fund levy or (2) ten percent of the school corporation's capital projects fund levy if the governing body includes in the authorizing resolution a certification that the employees of the school corporation will not receive a general wage and salary increase for the 2010-2011 school year.

3. Schools must give priority in the allocation of resources to remediation programs to students who are deficient in reading skills in Grades K-3.

4. The State Superintendent of Public Instruction in conjunction with the State Board of Education must develop a plan to improve the reading skills of students. The plan must include reading skill standards for Grade 3, an emphasis on a method for making determinant evaluations by Grade 3 that might require remedial action for the student, including retention, if reading skills are below the standard, and the fiscal impact of each component of the plan to the state or a school corporation. The State Superintendent must present those components of the plan that have a fiscal impact to the General Assembly to determine the amount of any appropriation in the state budget for the state fiscal years beginning in 2011 and 2012. To the extent a component of the plan does not have a fiscal impact, that component of the plan may be implemented after the State Board holds a public hearing at which there is full public discussion and review by the State Board.

5. A school employee who retires before July 1, 2010, does NOT have to be included in the state health insurance plan and pay at least the same premium as a retired state employee. This could allow some schools to elect for state coverage and therefore possibly reduce health insurance expenditures.

Senate Bill 23 Unemployment Insurance: Taxpayer Friendly

STATUS: SB 23 was passed by the Senate Rules and Legislative Procedure Committee 12-0 on January 11, 2010; passed by the Senate 50-0 on February 2, 2010; passed by the House Labor and Employment Committee 7-2 on February 14, 2010; passed by the House 82-17 on February 24, 2010; and sent to a Conference Committee. The Conference Committee Report was passed by the Senate 50-0 on March 13, 2010, and passed by the House 85-12 on March 13, 2010.

Watchdog Indiana Position on the Conference Committee Report

SB 23 is Taxpayer Friendly because the scheduled increase in unemployment insurance premiums is delayed for a year from January 1, 2010, to January 1, 2011. This delay will reduce revenue to the Unemployment Insurance Benefit Trust Fund between $314 million and $357.6 million. The delay will help Hoosier employers recover from the recession and start hiring employees.

Of the 27 states that have borrowed (as of February 16, 2010) from the federal government to pay unemployment compensation benefits, Indiana has borrowed the SECOND most on a per capita basis: Michigan ($346), INDIANA ($257), Wisconsin ($200), North Carolina ($197), California ($193), Pennsylvania ($183), Ohio ($169), South Carolina ($169), Kentucky ($153), Rhode Island ($151), New Jersey ($139), New York ($126), Illinois ($123), Arkansas ($97), Missouri ($93), Idaho ($91), Connecticut ($84), Nevada ($83), Minnesota ($79), Florida ($67), Texas ($66), Alabama ($43), Virginia ($26), Georgia ($20), South Dakota ($16), Colorado ($9), Massachusetts ($6). The unemployment insurance premium increase MUST begin in 2011 because it is NOT fiscally prudent to delay the premium increase any longer when the state has already borrowed $1.6498 billion from the federal government to meet its unemployment compensation obligations.

Senate Bill 114 Government Ethics: Taxpayer Friendly

STATUS: SB 114 was passed by the Senate Rules and Legislative Procedure Committee 12-0 on January 11, 2010; passed by the Senate 50-0 on February 2, 2010; and referred to the House Rules and Legislative Procedures Committee where it did not receive a hearing.

Senate Bill 114 is Taxpayer Friendly because it will make more transparent the actions of lobbyists and legislative liaisons to affect state government outcomes. The twenty Taxpayer Friendly provisions of SB 114 are listed next.

1. A member of the General Assembly may not become a lobbyist or legislative liaison for 365 days after ceasing to be a member of the General Assembly.

2. The amount of a single expenditure for gifts (including purchases from the business of a General Assembly member or candidate or executive branch member) that must be reported by a lobbyist is reduced from $100 to $50.

3. Gift expenditures that can be "clearly and reasonably" attributed to a particular applicable individual must be reported with respect to that particular applicable individual.

4. The calendar year threshold of lobbyist expenses that must be reported is reduced from $500 to $250.

5. A lobbyist may not make an expenditure of more than $50 unless the lobbyist receives the approval of the applicable individual beforehand after informing the applicable individual of the expenditure cost.

6. A lobbyist may not pay expenses for out-of-state travel for a legislative person with exceptions for (1) "public policy meetings" approved by the Speaker of the House of Representatives or the President Pro Tempore of the Senate or (2) if the expenses are associated with the legislative person's service as an officer, member of the board of directors, employee, or independent contractor of the person paying the expenses.

7. Legislative branch lobbyists must report gifts to the Indiana Lobby Registration Commission (ILRC), and the ILRC must compile these reports and provide them to the appropriate member of the General Assembly or candidate.

8. The ILRC is required to prepare, publish, index, and make available on the Internet all gift reports, statements, and filed documents.

9. The ILRC must make available on the Internet all manuals, indices, summaries, and other documents the Commission is required to compile, publish, or maintain.

10. The ILRC must adopt rules to determine the categories by which a lobbyist activity report must itemize expenditures.

12. Legislative liaisons of agencies in the executive branch of state government and of state educational institutions must report gift expenditures to the ILRC, and copies of these reports must be provided on the Internet.

13. Elected state officers and candidates for state office may not raise funds during the same period during the long session when legislators are barred from fund-raising. 

14. The circuit court clerk must provide copies of legislative candidacy documents from the Election Division's or the Secretary of State's website to a person requesting to see these documents.

15. A lobbyist's expenditure report must include expenses for a function or activity to which all or any of the members of the General Assembly are invited.

16. Rules are established for reporting an expenditure made by more than one lobbyist, the reporting of expenditures with respect to a particular legislative person, and allocation of expenditures made with respect to several legislative persons.

17. The daily penalty for failure to file lobbyist registration statements and activity reports is increased from $10 per day to $100 per day.

18. The maximum penalty for failure to file lobbyist registration statements and activity reports is increased from $100 to $4,500.

19. Legislators may not accept honoraria for appearances or speeches, but may accept payment or reimbursement of travel expenses.

20. A state elected official may not use the official's name or likeness in an audio, video, or newspaper publication paid for entirely or in part with appropriations made by the General Assembly.

Special note should be made of the SB 114 provision that keeps a General Assembly member from joining the lobbyist and legislative liaison ranks before a year goes by after ceasing to be a General Assembly member. The public good is NOT served if a public servant is using his or her current government influence as part of a lobbyist job application.

Special note is also made that SB 114 requires legislative liaisons of state agencies and state educational institutions to report certain expenditures. State agencies and state educational institutions certainly do make a concerted effort to influence state government outcomes, and their lobbying efforts should be as transparent as possible.

It is hoped that the legislative gift reports that include the lowered $50 minimum reportable amount will not only be made accessible on the Internet, but will also be included in a searchable online database that is easy to use.

When it comes to considering lobbyist gifts, one question should be asked – would any legislators retire if lobbyist gifts were eliminated entirely? If the answer to this question is YES, it is a clear indication that there are legislators who feel they are entitled to lobbyist gifts as one of the perks of being an elected official. Such an attitude interferes with the public service ethos that a legislator needs to serve the public good. A legislator is susceptible to corrupting influence if he or she feels entitled to lobbyist gifts. The way to combat this corrupting influence is to eliminate lobbyist gifts entirely.

In conclusion, SB 114 is Taxpayer Friendly because it will make more transparent the actions of lobbyists ad legislative liaisons to affect state government outcomes. 

Senate Bill 239 Property Tax Matters: Taxpayer Friendly

STATUS: SB 239 was passed by the Senate tax and Fiscal Policy Committee 11-0 on January 11, 2010, passed the Senate 50-0 on February 2, 2010; passed by the House Ways and Means Committee 24-0 on February 18, 2010; and passed by the House 99-0 on February 25, 2010. The Senate filed a dissent on March 1, 2010, and adopted the dissent on March 2, 2010.

Watchdog Indiana Position

The Senate and House versions of Senate Bill 239 can be combined to include the Taxpayer Friendly property tax provisions listed below. Some of these combined provisions deserve special mention.

The Department of Local Government Finance will be required to review a county Assessor’s land values if the lesser of 100 real property owners or 5% of the real property owners in the county file a petition not later than 45 days after the notice of values is provided. Also, a county Assessor may request that an employee of the Indiana Board of Tax Review assist in voluntary dispute resolution in a case where the county Property Tax Assessment Board of Appeals has not given notice of a decision on a taxpayer appeal. The importance of these two SB 239 provisions are emphasized by the following comments that I received in an E-mail from Cy Huerter on January 16:

"Here in Lake County, much of our property is way over assessed and trending has exacerbated rather than fixed the problem. Property tax appeals are taking 18 months or more to be heard. Lake County has maybe 30 thousand appeals in the works and the Appeals Board only meets once a month with no set number of appeals to be reviewed at each meeting. This board should be meeting daily and putting in overtime until this backlog is cleaned up. The "no brainers" should be cleaned up in bundles rather than calling in witnesses for these cut and dry cases."

The Taxpayer Friendly SB 239 provision that requires the county election board to submit controlled project referendum language to the Department of Local Government Finance for review and approval will help ensure that the ballot description of controlled projects is accurate and unbiased.

The cyclical reassessment provisions that require each county to reassess 20% of the parcels in each property class every year rather than conduct a general reassessment once every five years should result in more accurate assessments that do not change drastically from one year to the next.

The SB 239 provision that changes the definition of "homestead" to include a deck, patio, gazebo, and residential yard structure (other than a swimming pool) ATTACHED to the dwelling will reduce net homestead property taxes in those few counties that do not already consider these "attached" improvements as part of the dwelling. However, to make the homestead definition more sensible, the phrase "attached to the dwelling" should be deleted and replaced with legal language to include all non-commercial real and personal property improvements within not more than one acre of real estate immediately surrounding an individual’s principal place of residence. Any decisions about the configuration of the homestead acre should be left to the discretion of the homeowner. These homestead definition improvements will properly identify structures such as detached storage buildings and woodshops as part of a homestead.

In conclusion, the combined Taxpayer Friendly property tax provisions should be included in the Conference Committee version of SB 239. A conference committee change to make the homestead definition even more sensible would be welcome.

Combined Taxpayer Friendly Property Tax Provisions
Senate and House Versions of SB 239

1. (Senate) The county Assessor will determine all land values.

2. (Senate) The county Property Tax Assessment Board of Appeals will no longer have a land value review function, unless required to determine land values in a county where the county Assessor fails to do so.

3. (Senate) If both the county Assessor and the county Property Tax Assessment Board of Appeals fail to determine land values, the Department of Local Government Finance will determine the values.

4. (Senate) The Department of Local Government Finance will be required to review a county Assessor’s land values if the lesser of 100 real property owners or 5% of the real property owners in the county file a petition not later than 45 days after the notice of values is provided.

5. (House) A county Assessor may request that an employee of the Indiana Board of Tax Review assist in voluntary dispute resolution in a case where the county Property Tax Assessment Board of Appeals has not given notice of a decision on a taxpayer appeal.

6. (House) Beginning in 2011 for purposes of the standard deduction, supplemental deduction, local homestead credits, the 1% property tax cap, and other property tax laws, the term "homestead" includes a deck, patio, gazebo, and residential yard structure (other than a swimming pool) that is assessed as real property and attached to the dwelling.

7. (House) If a controlled project of a political subdivision is subject to a referendum vote, the county election board must submit the referendum language to the Department of Local Government Finance for review and approval to ensure that the description of the controlled project is accurate and unbiased.

8. (Senate) Counties will submit to the Department of Local Government Finance by December 31, 2010, a reassessment plan that divides the parcels in the county into five groups that each contain approximately 20% of the parcels in each property class.

9. (Senate) Beginning with the March 1, 2012, assessment date, each county will reassess one group each year rather than conduct a general reassessment once every five years.

10. (Senate) A county can submit a plan to reassess more than 20% (up to 100%) of the parcels in any one year.

11. (Senate) Parcels that are not reassessed in a year will still be subject to annual adjustments.

Senate Bill 240 Local Government: Taxpayer Friendly

STATUS: SB 240 was passed by the Senate Local Government Committee 7-4 on January 13, 2010; passed the Senate 29-19 on January 28, 2010; and referred to the House Government and Regulatory Reform Committee where it did not receive a hearing.

Senate Bill 240 is Taxpayer Friendly because of the fourteen provisions listed next. 

1. In each county after December 31, 2012, the county fiscal body shall exercise the legislative and fiscal powers assigned in the Indiana Code to township boards, including the authority to adopt the township's annual budget and to levy township property taxes for township funds.

2. If a township reorganizes with at least one other township after December 31, 2012, and the resulting new political subdivision is not a city or town, the county fiscal body is the fiscal body of the new political subdivision.

3. When formulating an annual budget, a township or (after December 31, 2012) the county fiscal body, must consider the ending balance that will remain in each township fund when setting budgets, rates, and levies relative to (a) the budgeted expenditures from the fund, (b) the fund balance that must be maintained by the township due to delayed property tax collections, and (c) the amount of tax anticipation notes or warrants or other obligations incurred by the township due to delayed property tax billings, collections, or distributions..

4. If the township board (before January 1, 2013) or the county fiscal body (after December 31, 2012) determines that the ending balance in a township fund is excessive, the township board or county fiscal body must transfer the excessive amount to the township's levy excess fund (which may be used for any lawful purpose included in the township's budget).

5. After December 31, 2012, a township may only collect property taxes for a capital improvement fund in a particular year if the township trustee prepares and the county fiscal body approves a proposed or amended capital improvement plan in the immediately preceding year that would estimate expenditures from, and revenues to, the various township cumulative funds for at least three years after the plan is adopted.

6. The Department of Local Government Finance must consider the following issues when reviewing a township's budget, tax rate, tax levy, and appeals: (a) the budgeted expenditures from the fund, (b) the fund balance that must be maintained by the township due to delayed property tax collections, (c) the amount of tax anticipation notes or warrants or other obligations incurred by the township due to delayed property tax collections, (d) whether the ending balance in the fund is excessive, (e) the township’s capital improvement plan with regard to a cumulative building fund or capital improvement fund.

7. For township budgets adopted for 2011, 2012, and 2013, the total amount appropriated by a township board for a particular year may not exceed the result of the total amount appropriated by the township board for the previous year multiplied by the assessed value growth quotient applicable to the township for the particular year.

8. If a township board determines after a public hearing in 2011, 2012, and 2013 that the township cannot carry out its governmental functions for a year under the assessed value growth quotient limitations, the township board, after approval by the township executive, may appeal to the Department of Local Government Finance for relief from the limitations for the year.

9. A relative of a township officer or employee is prohibited from being employed by the township in a position in which the relative would have a direct supervisory or subordinate relationship with the officer or employee. [Note: Relatives hired before July 1, 2010, can remain employed until January 1, 2015.] [Note: The definition of relative does NOT include (a) an individual who is a contractor or employed by a contractor for the design or construction of a public works project, (b) an individual who is a vendor or employed by a vendor for a purchase of mowing services or property maintenance services, and (c) an individual who is a member of a paid fire department or a volunteer fire department that renders fire protection services to the township.]

10. A township is prohibited from entering into a contract or renewing a contract with (a) an individual to provide goods or services to the township if the individual is a relative of the township trustee or (b) a business entity to provide goods or services if a relative of the township trustee has an ownership interest in the business entity.

11. The State Board of Accounts is required to annually prepare a report for the preceding calendar year that includes the following: (a) population of the township, (b) budget, (c) property tax levels (d) and property tax rates, (e) assessed valuation, (f) balance in each township fund, (g) summary of township assistance information, (h) summary of any statutory compliance issues or exceptions, (i) description of any interlocal agreements, (j) description of any resolutions or petitions concerning the township, (k) description of the property owned or leased by the township.

12. Each township office must include the address, phone number, and regular office hours (if any) of the township office in at least one local telephone directory.

13. A public meeting or a public hearing of a township official or governing body may not be held in a private residence.

14. A township trustee's annual report must list separately each expenditure that is made to reimburse the township trustee for the use of real and personal property for public business, including any reimbursements made for the use of a private residence, personal telephone, or personal vehicle for public business.

Some of these Taxpayer Friendly provisions are particularly important.

Having the county fiscal body exercise the legislative and fiscal powers of township boards can be expected to result in township government decisions that are not unduly influenced by any whims of township trustees.

The county fiscal body and the Department of Local Government Finance must consider the ending balance for a township fund when setting budgets, rates, and levies. Township governments statewide have $119.2 million in operating balances, excluding cumulative and capital projects funds, that exceed 10% of annual budgeted spending. It is hoped that the strengthened oversight in SB 240 will result in unneeded balances being used to actually help deliver needed services, thereby reducing property tax rates.

The State Board of Accounts is required to annually prepare a more comprehensive township report for the preceding calendar year. This will help to identify and correct poor fiscal practices.

Nepotism in township government will be controlled.

Even though Senate Bill 240 is Taxpayer Friendly, many Hoosiers have strong opinions – both pro and con – regarding township government. House Bill 1181 passed in the House on January 14, 2010. HB 1181 puts a statewide referendum on the November 2010 general election ballot in each township on whether to retain township government in that township. Voters should be able to exercise their collective wisdom to decide the fate of their local township government in the same way they decide if candidates will be sufficiently good public servants to justify election to the General Assembly.

Senate Bill 241 Local Government Issues: Taxpayer Friendly

STATUS: SB 241 was passed by the Senate Elections Committee 7-3 on January 19, 2010; passed the Senate 28-22 on February 2, 2010; and referred to the House Government and Regulatory Reform Committee where it did not receive a hearing.

The SB 241 provisions are Taxpayer Friendly that prohibit employees of a political subdivision who assume an elected office after June 30, 2010, from serving as elected executive, legislative, or fiscal officials within the same political subdivision. The prohibition does not apply to an employee of a political subdivision who holds elective office on June 30, 2010, as long as the individual continues to hold or be reelected to that office. It is a clear conflict of interest for public employees to benefit from their actions as elected officials. Also, the chain of command and procedures for discipline are upheld when employees of a political subdivision do not serve as elected policymakers for that political subdivision.

The following Taxpayer Friendly provisions of SB 241 will control local government nepotism: (1) a relative of an officer or employee of a political subdivision is prohibited from being employed after June 30, 2010, by the political subdivision in a position that would put the relative in a direct supervisory or subordinate relationship; (2) an employee of a political subdivision is not required to be terminated or reassigned from any position held by that individual before July 1, 2010, but this grandfathering provision expires January 1, 2015.

The Taxpayer Friendly SB 241 provisions moving all school board member elections to the November general election will likely increase voter turnout.

It is Taxpayer Friendly that SB 241 includes the following Marion County provisions: (1) a building authority must submit its operating and maintenance budget and tax levy to the city-county council for approval, (2) the nine township constables and any full-time deputies they employ must file an annual statement of economic interests with the commission on judicial qualifications. 

Most of the SB 241 provisions establishing the use of vote centers as an option for all counties are Taxpayer Friendly because the resulting overall reduction in the number of polling places will reduce the cost of elections by requiring fewer poll workers. However, the printing of poll books should be phased out at vote centers only after electronic poll lists are found to be reliable during a couple of election cycles.

Finally, the SB 241 provisions are modestly Taxpayer Friendly that allow the county legislative body in counties other than Marion County to adopt an ordinance that replaces the board of county commissioners with a single elected county chief executive officer and empowers the county council to exercise both the county’s legislative and fiscal powers and duties. An ordinance providing for a single elected county executive officer must be approved by: (1) a unanimous vote of all the elected members of the county legislative body, in the case of a county legislative body with not more than three members; or (2) a vote of at least two-thirds of all the elected members of the county legislative body, in the case of a county legislative body with more than three members.

Some Hoosiers earnestly believe the three-headed boards of county commissioners should be replaced with a single elected county chief executive officer to provide county government with a streamlined executive structure that will be more responsive to citizens and can more readily take the definitive actions necessary in today’s complex world. Other Hoosiers are adamant that a single "county king" will create an atmosphere where fiscal abuse to the point of corruption is more likely.

Some Hoosiers earnestly believe establishing the county council as the single legislative body for county government will be better understood by citizens and businesses and minimize buck passing. Other Hoosiers are adamant that continuing to divide legislative powers and duties between the board of commissioners and county council provides a vital balance of power.

To best resolve these conflicting opinions, a statewide referendum should be placed on the November 2010 general election ballot in each county on whether to replace the board of county commissioners with a single elected county chief executive officer and establish the county council as the county’s only legislative body. Voters should be able to exercise their collective wisdom to decide the fate of their county commissioners in the same way they decide if the members of this Committee are sufficiently good public servants to justify election to the General Assembly.

In conclusion, SB 241 should be passed because of the following Taxpayer Friendly provisions:

(1) employees of a political subdivision are prohibited from serving as elected officials within the same political subdivision,

(2) local government nepotism is controlled,

(3) all school board member elections are moved to the November general election,

(4) there is building authority budget oversight and constable economic interests filing in Marion County,

(5) the use of vote centers is established as an option for all counties.

SB 241 should be amended to allow the voters in each county to determine the fate of their county commissioners by referendum.

Senate Bill 250

STATUS: SB 250 was passed by the Senate Tax and Fiscal Policy Committee 11-1 on January 19, 2010; passed by the Senate 48-2 on January 26, 2010; passed by the House Ways and Means Committee 23-0 on February 10, 2010; and not "called down" by Representative William A. Crawford for a final House vote.

A SB 250 amendment was passed on the House floor 95-0 on February 15, 2010, to eliminate the debt service property tax caps exemption until 2020 in Lake and St. Joseph counties - in other words, Lake and St. Joseph counties would immediately have the same 1% - 2% - 3% property tax caps as the other 90 counties.

Senate Bill 253 Constitutional Amendment Ballot Language: Taxpayer Friendly

STATUS: SB 253 was passed by the Senate Tax and Fiscal Policy Committee 8-3 on January 26, 2010; passed by the Senate 36-14 on February 2, 2010; and referred to the House Ways and Means Committee where it did not receive a hearing.

Senate Bill 253 is Taxpayer Friendly because the following constitutional amendment ballot language is simply splendid in every regard:

PUBLIC QUESTION

    Shall property taxes be capped for all classes of property by amending Article 10, Section 1 of the Constitution of the State of Indiana to:
        (1) limit a taxpayer's property tax liability to 1% of the gross assessed value of homestead property, 2% of the gross assessed value of other residential property, 2% of the gross assessed value of agricultural land, 3% of the gross assessed value of other real property, and 3% of the gross assessed value of personal property, excluding any property taxes imposed after being approved by the voters in a referendum and excluding property taxes that are for bonds issued before July 1, 2008, and are imposed before 2020 in Lake County or St. Joseph County;
        (2) permit the General Assembly to exempt a mobile home used as a homestead to the same extent as real property; and
        (3) specify that a property tax exemption may be granted in the form of a deduction or credit, and that the General Assembly may impose reasonable filing requirements to obtain an exemption, deduction, or credit?

Senate Bill 258 Reading Skills: Taxpayer Friendly

STATUS: SB 258 was passed by the Senate Education and Career Development Committee 8-3 on January 20, 2010; passed by the Senate Appropriations Committee 9-3 on January 26, 2010; passed by the Senate 33-17 on February 2, 2010; and referred to the House Education Committee where it did not receive a hearing.

It is Taxpayer Friendly that Senate Bill 258 requires the annual report submitted by a school to the Department of Education and placed on their website must include ISTEP reading test scores and student retention information for Grades K-10.

It is also Taxpayer Friendly that SB 258 requires the State Superintendent of Public Instruction in conjunction with the State Board of Education to develop a plan to improve the reading skills of students. The plan must include reading skill standards for Grade 3, an emphasis on a method for making determinant evaluations by Grade 3 that might require remedial action for the student, including retention, if reading skills are below the standard, and the fiscal impact of each component of the plan. The State Superintendent must present those components of the plan that have a fiscal impact to the General Assembly to determine the amount of any appropriation in the state budget for the state fiscal years beginning in 2011 and 2012. To the extent a component of the plan does not have a fiscal impact, that component of the plan may be implemented after the State Board holds a public hearing at which there is full public discussion and review by the State Board. 

It is further Taxpayer Friendly that SB 258 requires schools to give priority in the allocation of resources to remediation programs to students who are deficient in reading skills in kindergarten through Grade 3. However, money spent on remediation generally yields little in the way of education improvement. The key to education improvement is for students to live in communities that highly value education.

Indiana students are more likely to receive a good education if they live in communities that highly value education.

This brings up the question, How can communities that highly value education be identified?

An even more important question is, How can communities that do NOT highly value education be improved?

An answer to both of these questions can be found in the H.E.L.P. program. H.E.L.P. is an acronym for Homework Enhances Learning Potential.

H.E.L.P. focuses on Grade 1, 2 and 3 Students because these are the crucial early years of education where Students gain the essential skills, knowledge, and dispositions critical to later school success.

All Grade 1, 2 and 3 Teachers must assign meaningful Homework every school day that requires the supervision of a Mature Homework Partner.

A Mature Homework Partner can be a Parent, Guardian, relative, neighbor, and anyone at least 14 years of age. If a Parent or Guardian cannot - or will not - provide a Mature Homework Partner, then volunteer resources from the Community can be used such as those youth development clubs and organizations that offer young people some structure for their out-of-school time.

Every Grade 1, 2 and 3 Student receives a Daily Homework Assignment Sheet that must be signed by a Mature Homework Partner after the Mature Homework Partner supervises the Student’s homework completion.

The Daily Homework Assignment Sheets are tabulated weekly to compute the H.E.L.P. Rate by grade in each School with Grade 1, 2 and 3 Students. The H.E.L.P. Rate is the percent of Students whose Homework was supervised by a Mature Homework Partner every day they attended school during the week.

All Schools will use their School PIN and Password to promptly input their weekly Grade 1, 2 and 3 H.E.L.P. Rates on the State K-12 Data Website. Because the posted H.E.L.P. rates are computed by grade within each School, individual Students needing the assistance of a Mature Homework Partner cannot be identified without the assistance of a School Principal.

Interested Community members can use the State K-12 Data Website to keep track of their School’s H.E.L.P. Rates and meet with their School Principals to volunteer assistance to those Students needing a Mature Homework Partner. H.E.L.P. can be implemented with almost no state and local cost increases.

When a Community uses all its resources to increase the H.E.L.P. Rates of its Schools, the Community sends a clear message every day to its First, Second, and Third Grade Students that education is highly valued. These Students are more likely to receive a good education with a minimal reliance on remediation.

In conclusion, the SB 258 school annual report improvements are Taxpayer Friendly as are the reading skills improvement plan and the priority allocation of remediation program resources to K-3 students who are deficient in reading skills.

SB 258 should be amended to require the Department of Education to include on the State K-12 Data Website for each School who chooses to participate the weekly percentage of Grade 1, 2 and 3 Students whose Meaningful Homework was supervised by a Mature Homework Partner every day they attended school during the week. Existing DOE resources can be used without increased cost to post the data that will be provided by Schools on a voluntary basis. The posted data can be used by volunteer organizations and individuals to help make certain Grade 1, 2 and 3 Students in their community receive the help they need to perform at grade level before they reach the fourth grade.

Senate Bill 309 School Corporation Budget Year: Taxpayer Neutral

STATUS: SB 309 was passed by the Senate Appropriations Committee 8-4 on January 21, 2010; passed by the Senate 36-14 on February 2, 2010; passed by the House Education Committee 9-3 on February 22, 2010; passed by the House 83-16 on February 25, 2010; and sent to a Conference Committee. The Conference Committee Report was passed by the Senate 50-0 on March 5, 2010, and passed by the House 94-1 on March 10, 2010.

SB 309 eliminates the requirement that a school corporation begin budgeting on a school year basis in 2011, and permits a school corporation in any year to determine whether to budget on a calendar year or school year basis.

Senate Bill 324 Constitutional Amendment Explanation Summaries: Taxpayer UNfriendly

STATUS: SB 324 was passed by the Senate Judiciary Committee 10-0 on January 27, 2010; passed by the Senate 48-2 on February 2, 2010; and referred to the House Elections and Apportionment Committee where it did not receive a hearing.

All written summaries create bias. This bias is created when decisions are made about what should be summarized, how it should be summarized, and how the summary should be presented.

The following digest prepared by the Legislative Services Agency summarizing the constitutional amendment in House Joint Resolution 1 can be used to demonstrate how written summaries create bias: "Circuit breakers and other property tax matters. Requires, for property taxes first due and payable in 2012 and thereafter, the general assembly to limit a taxpayer's property tax liability as follows: (1) A taxpayer's property tax liability on homestead property may not exceed 1% of the gross assessed value of the homestead property. (2) A taxpayer's property tax liability on other residential property may not exceed 2% of the gross assessed value of the other residential property. (3) A taxpayer's property tax liability on agricultural land may not exceed 2% of the gross assessed value of the property that is the basis for the determination of the agricultural land. (4) A taxpayer's property tax liability on other real property may not exceed 3% of the gross assessed value of the other real property. (5) A taxpayer's property tax liability on personal property may not exceed 3% of the gross assessed value of the taxpayer's personal property that is the basis for the determination of property taxes within a particular taxing district. Specifies that property taxes imposed after being approved by the voters in a referendum shall not be considered for purposes of calculating the limits to property tax liability under these provisions. Provides that in the case of a county for which the general assembly determines in 2008 that limits to property tax liability are expected to reduce in 2010 the aggregate property tax revenue that would otherwise be collected by all units and school corporations in the county by at least 20%, the general assembly may provide that property taxes imposed in the county to pay debt service or make lease payments for bonds or leases issued or entered into before July 1, 2008, shall not be considered for purposes of calculating the limits to property tax."

The following Public Question ballot language was passed by the Senate Tax and Fiscal Policy Committee on January 26, 2010, for the constitutional amendment that will be on this November’s statewide ballot:

PUBLIC QUESTION

    Shall property taxes be capped for all classes of property by amending Article 10, Section 1 of the Constitution of the State of Indiana to:
        (1) limit a taxpayer's property tax liability to 1% of the gross assessed value of homestead property, 2% of the gross assessed value of other residential property, 2% of the gross assessed value of agricultural land, 3% of the gross assessed value of other real property, and 3% of the gross assessed value of personal property, excluding any property taxes imposed after being approved by the voters in a referendum and excluding property taxes that are for bonds issued before July 1, 2008, and are imposed before 2020 in Lake County or St. Joseph County;
        (2) permit the General Assembly to exempt a mobile home used as a homestead to the same extent as real property; and
        (3) specify that a property tax exemption may be granted in the form of a deduction or credit, and that the General Assembly may impose reasonable filing requirements to obtain an exemption, deduction, or credit?

Even though the single-paragraph HJR 1 digest is 298 words long, no mention whatsoever is made of Public Question item 3. The biased implication is that item 3 is unimportant. Nothing could be further from the truth.

Item 3 protects from legal challenge the following homeowner property tax deductions: $45,000 homestead standard, 35% supplemental standard, mortgage, 65 or over, blind or disabled, partially disabled veteran - service connected, disabled veteran, rehabilitation, solar energy, wind-powered devices, hydro-electric power device, geothermal energy.

Item 3 also permits the General Assembly to enact property tax deductions and credits for most tangible personal property including manufacturing equipment, construction equipment, and farm equipment.

Everyone can agree that Public Question item 3 is certainly important enough to be included in a constitutional amendment summary. It is enlightening to follow the steps mandated in SB 324 to improve the HJR 1 digest to include the deductions and credits protection implicit in Public Question item 3.

The LSA would have to prepare an improved summary that properly conveys the importance of the deductions and credits protection. The improved summary would likely include one or more paragraphs separated by white space with a caption, some bold type, and a reader-friendly font and font size.

SB 324 then requires the LSA to submit the improved summary to the 16-member Legislative Council not later than 105 days before the November 2 election. Since 11 of the Legislative Council members voted for HJR 1, the Council members would be politically inclined to accept the improved summary.

SB 324 would require this process, in one form or another, to be repeated again and again for every constitutional amendment. Interested parties would earnestly and energetically work their political channels to influence the Council members until a completed summary is submitted by the LSA to the Legislative Council for final approval. If there is a tie vote in the Legislative Council that cannot be resolved in a timely manner, SB 324 stipulates that the completed LSA summary must be distributed and posted.

SB 324 further requires the LSA, not later than 60 days before the election, to distribute copies of the summary to various entities and to post the summary on the General Assembly's Internet web site. A copy of the summary must also be posted at each polling place.

It is apparent that the constitutional amendment summary scheme in SB 324 can itself be summarized as follows: (1) a biased summary is necessarily created, (2) a summary is most likely to be a political product of the Legislative Council, (3) a summary might be an LSA work product that is not approved by the Legislative Council or any other duly elected legislative body, (4) the SB 324 summary will be given preference at the polling place over all other summaries prepared by interested parties.

In addition, the LSA will have to contract with a professional technical writer to prepare constitutional amendment summaries if SB 324 passes. The LSA does a good job of condensing bill legal language into legislator-friendly summaries. However, the readability requirements of constitutional amendment summaries should exceed that of legislator-friendly bill summaries. The LSA invariably uses 20 words when 10 words would convey the message more clearly to the typical voter. The LSA does not currently have the personnel needed to create voter-friendly constitutional amendment summaries.

The preparation of so-called neutral constitutional amendment summaries that MUST be posted at all polling places and otherwise distributed as an official function of the state government is too inherently political to be entrusted to any legislative body or agency. It is not humanly possible to prepare neutral summaries, and any official attempt by the state to do so necessarily violates the free speech protection in the U.S. Constitution. State-approved constitutional amendment summaries under SB 324 are meant to be identified by voters as ideally neutral, thereby obstructing free speech by improperly identifying the constitutional amendment summaries prepared by other interested parties as being less neutral.

In conclusion, the preparation of constitutional amendment summaries is a biased political process. Requiring the state to favor its summary at the expense of other summaries is an obstruction to constitutionally protected free speech. The LSA does not have the personnel needed to create voter-friendly constitutional amendment summaries. Because voters benefit when EVERYONE interested in offering summaries are free to do so without the state expressing an improper preference, it is good that SB 324 does not apply to the Public Question that will be on the November 2, 2010, ballot. However, SB 324 should not be passed unless the provision is REMOVED that requires future constitutional amendment summaries to be posted at all polling places.

Senate Bill 396 Agricultural Land Assessment: Taxpayer Friendly

STATUS: SB 396 was passed by the Senate Tax and Fiscal Policy Committee 11-0 on January 26, 2010; passed by the Senate 50-0 on February 2, 2010; passed by the House Agriculture and Rural Development Committee 12-0 on February 16, 2010; passed by the House 99-0 on February 24, 2010; and sent to a Conference Committee. The Conference Committee Report was passed by the House 97-1 on March 4, 2010, and passed by the Senate 50-0 on March 13, 2010.

Watchdog Indiana Conference Committee Position

The great majority of farmers in Indiana are working families just like those working families who live in homesteads, other residential, and commercial apartments.

The Department of Local Government Finance is required (beginning with property taxes payable in 2011) to use an adjusted six-year average that eliminates the highest value to calculate the base rate for the assessment of agricultural land.

SB 396 will lower the base value per acre of farmland from $1,400 to $1,290 in 2011, from $1,700 to $1,500 in 2012, and from $1,810 to $1,620 in 2013. These reductions in the farmland base rate will result in a smaller tax base, leading to a higher tax rate.

SB 396 will decrease the 2011, 2012, and 2013 net property tax from farmland by $75.1 million, or about 8.0%.

SB 396 will increase the 2011, 2012 and 2013 net property tax of those working families who live in homesteads, other residential, and commercial apartments by $31.0 million, or about 0.4%. This net property tax increase will be somewhat offset by an increase in the property tax cap circuit breakers.

It is unbecoming for one class of working family to begrudge the meaningful property tax relief of another class of working family when no working family class suffers a significant property tax shift.

SB 396 is Taxpayer Friendly because farm working families will enjoy meaningful property tax relief while other classes of working families will not suffer a significant property tax shift.

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