O'Bannon reviews property
tax
By Heather Mangold
City
Editor
Gov. Frank O’Bannon and Lt. Gov. Joe Kernan
released a tax-restructuring plan on Thursday that has local legislators
feeling differently about Indiana’s financial situation.
The plan, which was the first-ever comprehensive
plan to restructure Indiana’s tax code, declared that it was unacceptable
for Hoosiers to pay a 33 percent court ordered reassessment of property
tax. In an effort to decrease the financial burden on Hoosiers, O’Bannon
and Kernan worked with fiscal experts for five months to come up with
alternate means of funding for the state.
Rep. Sheila Klinker, D-27th, said she thought the
plan was a bold and courageous step.
"It may just be the first step, but certainly
it was a step ahead into the future for the state of Indiana,"
said Klinker. "Now is the time for all good men and women to go
to work to make a difference."
The alternative funding released by O’Bannon
and Kernan could mean implementation of a cigarette tax and gambling
tax.
"I think Indiana will need that," said
Klinker.
According to the plan, an increase in the state
sales tax would be put in place, going from five percent to six percent
if it were passed. Imposing a business franchise tax and establishing
a single corporate net income tax rate of 8.5 percent is included in
the plan. It also includes making the income tax more progressive by
establishing rates of 3.9 percent for the first $90,000 of state taxable
income and 4.4 percent for income above $90,000.
Rep. Sue Scholer, R-26th, said she was pleased
to see that the plan was so complete, but felt as though some changes
should be made.
"I guess I can’t react too much until
I see the effects on different constituencies," said Scholer. "By
next week, the plan is that Republican fiscal people will be analyzing
it and commenting as a group."
Scholer said she was concerned about the effects
the tax plan would have on tax incremental financing (TIF) funds. These
funds have supported several new projects in West Lafayette, including
Wabash Landing.
Scholer said that next she looks for a good analysis
of the ramifications of the plan.
"I feel very strongly that a tax plan has
to promote economic development and to create a better business environment
for businesses," said Scholer.
Scholer said she would like to see this improvement
so that personal income in Indiana would reach higher into the national
average. Scholer added that she would like to look at the plan as a
whole before deciding on the appropriate action to take.
Klinker said that some legislators suggested that
now was not the time to address tax-restructuring, but she disagreed.
"The governor and the lieutenant governor
did what was right. It’s time to do it this session," said
Klinker.
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