Tax And Budget Plans 2001-03
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Watchdog Indiana's Property Tax Relief And Business Tax Restructuring Solutions present (1) Taxpayer Friendly Improvements to the version of House Bill 1001 (SS) passed by the Indiana House of Representatives on June 6, 2002, and (2) a Taxpayer Friendly solution that decreases the net homeowners property tax levy and effectively restructures business taxes without individual income and sales tax rate increases.
Watchdog Indiana's Budget Shortfall Solutions rely on spending cuts and fund transfers with (1) minimal tax increases and (2) no tax increases.
Individuals Versus Business Tax Splits for House Bill 1001 (SS) (1) as passed by the Indiana General Assembly on June 22, 2002, (2) as amended by the Senate Finance Committee on June 13, 2002, (3) as passed by the Indiana House of Representatives on June 6, 2002, and (4) as changed by the May 22, 2002, House GOP compromise plan.
Please read the following May 8, 2002, E-Mail sent to the Governor, Lt. Governor, and every General Assembly member:
The Senate District 21 primary voters sent a clear message to Senate Republicans when they elected Jeff Drozda over Steve Johnson. Tax increases are not needed to balance the state budget, and any property tax relief and business tax restructuring solutions must be revenue neutral.
Seventeen General Assembly incumbents had opposition in the May 7 primaries. Mr. Johnson was one of only two to be defeated. The true significance of this defeat is shown when one analyzes the tax restructuring plan endorsed by Mr. Johnson in return for campaign assistance from business lobbyists and Senate Republican leaders.
Mr. Johnson used his position of leadership in the Senate Finance Committee to help develop a tax restructuring "compromise" that would use sales and individual income tax rate increases to give the state $998 million more than would provided in tax benefits through June 30, 2004. Almost 75 percent ($745 million) of this tax increase would come from individuals as opposed to businesses. Businesses and utilities would have 30 percent property tax decreases, while the property tax relief for farmers and homeowners would be 8 and 13 percent.
One can follow the money to see how business lobbyists came up with such a sweet deal from Senate Republicans. Mr. Johnson, who had more money for his campaign than any other General Assembly candidate in the primaries, outspent Mr. Drozda at least 3-to-1. Some of his largest contributors included the following: Indiana Association of Realtors $8,736; Indiana Business for Responsive Government $7,700; Indiana CPA PAC $1,800; Friends of Indiana Hospitals $1,500; Insurance PAC $1,000; LawPac $1,000.
It is particularly interesting to note that Mr. Johnsonís largest campaign contributor was the Senate Republican leadership. The Senate Majority Campaign Committee gave a whopping $16,625.
Mr. Drozda had two issues in his campaign Ė family values and taxes. Mr. Drozda knows that this bienniumís budget can be balanced with spending cuts and fund transfers and without tax increases, less K-12 education cuts, and lowered Medicaid cuts. Mr. Drozda also favors property tax relief and business tax restructuring solutions that are revenue neutral and do not include sales and income tax rate increases.
In Mr. Drozda, Senate District 21 voters chose a results-oriented, compassionate, fiscal conservative over business-as-usual tax increases on individuals. The Senate Republican leaders and their so-called tax restructuring compromise were clearly repudiated. All General Assembly members should take note of this when they convene for the special session on May 14.
Please read the following letter to the Assistant Managing Editor in the December 13, 2001, Lebanon Reporter:
Bloated budget needs no taxes
In a recent commentary article about a candidate for Indiana's Secretary of State, the Assistant Managing Editor for The Lebanon Reporter makes the following statement: "Indiana is broke; tax increases are the only realistic way to haul Hoosier government out of the money pit."
This statement is misleading because Indiana is not currently "broke." Taxpayers have provided more than enough money to the state government. Modest spending cuts can easily keep the state's budget balanced through the 2003 fiscal year.
Details about the fiscal facts listed next can be found on my Watchdog Indiana website at http://www.finplaneducation.net.
State cash revenues for fiscal year 2000 (the latest year for which audited figures are available) totaled $23.7 billion. This was a 23 percent, or $4.4 billion, increase over fiscal year 1997.
State cash spending for fiscal year 2000 totaled $23.9 billion. This was a 23 percent, or $4.4 billion, increase over fiscal year 1997.
State long-term debt assumption at the end of fiscal year 2000 totaled $3.8 billion. This was a 13 percent, or $421 million, increase over fiscal year 1997.
These facts are alarming when one considers that from 1997 to 2000 the inflation rate increased less than 8 percent and Indiana's population increased less than 4 percent.
In other words, the 19 percent increases in state cash revenues and spending per citizen from 1997 to 2000 were two-and-a-half times more than the rate of inflation. Indiana's citizens provided, and the state spent, $2.2 billion more than necessary to keep up with the inflation and population increases from 1997 to 2000.
The current state budget is bloated enough from the excesses of past years that $1.5 billion of spending cuts can easily be made the next 18 months. There is absolutely no need for any tax increases.
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This page was last updated on 03/19/10.