Indianapolis joins the high-tax cities

The second major property tax increase in Marion County in the past four years has left many homeowners reeling and renewed concerns about the possibility that many longtime property owners may be driven out of the city of Indianapolis.

Prior to 2004, when state courts ordered that Indiana change its methods of property assessment, Indianapolis homeowners paid considerably less on average than homeowners in other, comparable cities across the country. The city’s relatively low property taxes fit comfortably with a variety of other local economic indicators to make Indianapolis one of the most affordable big cities in the U.S.

But that situation began to change with the 2004 property tax increase — and the 2007 increase appears to have thrown the Indianapolis cost of living into a higher tier relative to other U.S. cities.

Tax rankings were published in 2006 by CNNMoney.com in a special report called “Tax-friendly places 2006.” When it came to property taxes, Indianapolis ranked 11th out of 51 cities, ahead of Houston, Seattle, Philadelphia, Boston, Minneapolis, Columbus, Ohio, and Washington, D.C. We came in just behind Chicago, Milwaukee and Atlanta.

The report poses some troubling questions: What do we have to show for our transformation from a city with a low rate of property tax to a high rate? Are city services — from public safety to schools to streets and sewers — better than ever?

Gov. Daniels issued the following statement on July 10:

“As governor, I will take every step I have authority to take to help Hoosier homeowners. First, I have directed the Department of Local Government Finance to approve any county’s application to permit homeowners to pay their property taxes in installments and to extend bill due dates. I have ordered the Indiana Bond Bank to facilitate short-term financing by local governments that need cash while awaiting these installments.”

Other Daniels initiatives include exploring the idea of a special legislative session, demanding the DLGF probe disparities between residential and commercial reassessment and considering what current costs can be shifted from local to state government.

Daniels says, “The bottom line is there can be no solution without greater control of local spending and borrowing.”

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