State Rep. Wes Culver’s “Reader’s Point of View” (Sept. 30) referred to my “Mayor’s Message” in the latest version of Goshen City government’s MapleCityNow newsletter. While I agree with some of what he said, there are a few statements that need correction.
He commented that my message was political and should have been paid with campaign funds. I disagree. Nothing I said promoted me. Nowhere did I mention any candidate names or even political parties.
Rep. Culver said I encouraged people to vote for candidates who will raise taxes. Nowhere did I say that and it misrepresents the message. What I said was that people should vote for candidates who understand the connection between community quality of life (or quality of place) and the ability to attract residents and business to that community. The message is also that decisions made at the state level have influence on whether local revenues continue to decline. Adequate funding to continue necessary and desired services is critical to economic development.
It is a fact that quality of place will suffer if local government, schools and libraries continue to see declining revenues. I was not making a case to increase taxes, but rather to halt the decline. The consequences of property tax caps are continuing to become more severe. Goshen’s property tax revenue was $1.6 million lower in 2011 than it was in 2008. State distribution of fuel taxes was more than $100,000 lower in 2011 than 2003. In those nine years, costs to pave streets have increased. Income taxes in 2011 were more than $1 million less than in 2006.
How have we coped? We’ve left positions vacant through attrition. We’ve consolidated some responsibilities. Schools and libraries have taken similar measures. But eventually, if revenues continue to decline, services will suffer. Class sizes in schools will increase. Some extra-curricular activities will be curtailed. The Goshen Public Library has already reduced hours it is open. And the city of Goshen cannot continue to offer all the services it has provided in the past with shrinking revenues.
Candidates for state offices from both political parties are talking about further reducing a variety of taxes. Gasoline, corporate income, personal income and sales taxes and property taxes on business personal property have all been mentioned as revenues to cut. This means less money coming to local government. The noose gets tighter. I wasn’t asking for tax increases, rather to stop the decline.
Rep. Culver is correct that, as the economy improves, assessed values, property taxes and income taxes will eventually turn around. But for income taxes, since there is a nearly two-year lag from the time income taxes are withheld from paychecks until they are returned to local government from the state, rebound will not be as fast as economic uptick. Also, while some homeowners saw their assessed values increase this year, many others saw decreases. Many industrial assessed values decreased. The total community assessed value is estimated to be about 3 percent lower than a year earlier. This means maximum property taxes paid go down. If things improve to where the community assessed value increases 2 percent per year, it will be 2022 before Goshen’s assessed value is back to what it was in 2007.
Mr. Culver stated that “It’s not government that builds quality of life, it’s the people.” I certainly agree that all the great events, businesses and organizations he mentioned are vital contributors. We wouldn’t be nearly as good without them. I’ve often referred to our many community volunteers, churches and not-for-profit organizations as the thread that binds our community quilt tightly together. But services coming from adequately funded local government, schools and libraries are also critical.
Rep. Culver is also correct in stating that 71 percent of Indiana voters chose to support the constitutional amendment making property tax caps permanent. But many voters (and, I believe, legislators) did not fully understand the magnitude of potential consequences. It’s a complicated formula, with moving parts varying outcomes. In Goshen, where there were some educational programs on future effects of property tax caps at local service clubs, the public library and information in local newspapers, the vote was 60 percent. And in some precincts, the vote was less than 50 percent.
It is true that some people hate all property taxes (perhaps even all taxes). But most of the complaints legislators heard were in reaction to the unpredictability in homeowners’ property taxes from one year to the next. As legislative changes were made to the assessment method, elimination of inventory taxes (both changes perhaps the right things to do), it caused spikes in property taxes. If business personal property is also exempted from property taxes, it will result in another spike for homeowners who have not yet hit their maximums. Legislators will hear more complaints, and may respond with more constriction on local government.
Rep. Culver closed his article saying “instead of asking candidates if they are willing to raise taxes, I encourage you to ask them if they have what it takes to offer superior services without raising taxes.”
I close by quoting my suggestion in the MapleCityNow newsletter. “If or when you have a chance to speak with candidates for state office, ask how much they value quality of life. If they don’t seem to understand that good quality of life is essential to retaining and attracting a talented work force necessary to grow high-skill, high-wage jobs, set them straight. And if they don’t understand that quality city services, public safety, nice neighborhoods, attractive parks, strong schools and good libraries can’t happen with continually shrinking revenue, vote for someone who does understand. Of course, few people love to pay taxes, but there’s a healthy and reasonable balance here.”
Allan Kauffman has served as mayor of Goshen since 1999.