Great Recession lingers in Indiana

 

There are 17 legislative interim summer study commissions operating in Indiana. From these will come the blueprints for legislation in the next session.

These commissions cover a wide area of legislative responsibility affecting most households and businesses. But you cannot be sure what they are studying from their titles alone. The interim committee on Agriculture and Natural Resources is studying recreational trails and shooting preserves. I hope they have no intention of combining them.

Commerce and Economic Development seems limited to the medical device industry. The committee on Fiscal Policy doesn’t seem to have met until August 28 to examine the effectiveness of tax credits vs grants in historic preservation as well as Indiana’s stance on health care issues. Their next meeting is scheduled for September 30, but no agenda has been posted. There’s no hurry; it’s only the public’s health that is at stake.

The Commission on Business Personal Property and Business Taxation will hold its first meeting on September 15. Then we’ll get an overview of individual and business taxes in Indiana, including the distribution of those tax burdens. It should be a sensational session if the public, beyond the heavyweights of the business community, shows up.

Let me guarantee a topic that will not be on the agenda if even mentioned. It is a topic forbidden to be discussed in the halls of the General Assembly. In fact, a prominent legislator once told me it would be mentioned “only over my dead body.” Wishing ill to no man, I mention it here: The return of part of the Indiana sales tax to local governments.

We do not know how much money the seven percent Indiana sales tax collects in Lake or Marion, Cass or Clark, Vanderburgh or any specific county. But why not return part of the sales tax to the county where it is collected? This would help the central urban counties of our state which provide the retail opportunities for those in suburban and rural counties.

The actual amount collected in each county is a secret guarded by the state legislature and not included in the Annual Report of the Department of Revenue. There was an annual tabulation by that agency which was, to the best of my knowledge, only a replication of unaudited aggregated company reports.

Given the harsh cutbacks made in support of local government services, it makes sense to share the state’s sales tax receipts with our counties, cities, towns, schools and libraries.

This is not an invitation for the state legislature to pass the buck to the local governments, as they have done with the local income tax. If the sales tax needs to be raised, it should be uniform across the state and done by the General Assembly. We don’t want the mess Illinois has where individual communities have separate sales tax authority. It would require another study commission to rid us of that foolishness.

Mr. Marcus is an economist, writer, and speaker who may be reached at mortonjmarcus@yahoo.com.

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