Loading ...A FRIENDLY DISAGREEMENT
My good friend Thomas Cook over at Blue Indiana is taking issue with Governor Mitch Daniels’ latest ad. In it, Daniels says he balanced the budget without raising taxes. Cook argues Daniels did raise taxes in the form of the sales tax, cigarette tax and increases in property taxes.
Since a lot of us are still recovering from last week, I’m willing to give the recent IU grad (congrats by the way, Thom) a pass on this one. However, allow me to set a couple things straight.
Daniels’ claim is that he balanced THE STATE’S budget without a tax increase, which is accurate. The Governor did not raise state taxes. His administration held the line on spending. Daniels’ opponents argue that he did that by balancing the state’s budget on the back of local governments by holding back property tax replacement revenue which led to the massive increase in last summer’s tax bills. Actually that was only part of it, fundamentally what led to the increase in tax bills was the assessments and local government spending, which is where 99 percent of your property taxes go anyway. And that sales tax increase was to help pay for property tax relief and the state’s assumption of a number of levies such as child welfare and police pensions.
The increase in the cigarette tax was part of a bi-partisan effort to provide health care to uninsured Hoosiers; something that has been a corner stone for my Democratic friends.
I do think the 2008 Governor’s race is going to a referendum on Daniels; as most re-election bids are. And I think the Daniels’ folks should be worried about a year where change is the big theme and Democrats are expected to come out in droves.
I also think Jill Long Thompson comes in with about 40-percent of the general electorate, but she os going to have to convince 11 extra percent that this state is going in the wrong direction. And by the way, the race for the Governor’s office is going to be won or lost in Southern Indiana (Jill did well up north, Mitch is strong in central Indiana).
Either way, it’s going to be fun to watch.
May 13th, 2008 at 7:05 am
It’s funny that the Democrats will be running on ‘change’ while at the same time complaining that Daniels has changed too much about the Hoosier State.
Daniels is one of the most innovative governors in the country, and his administration has been tremendous for Indiana. He deserves a second term.
May 13th, 2008 at 7:29 am
Well, my friend Abdul, it is incorrect to say Daniels raised taxes ALONE.
The legislature AND Daniels raised our state sales tax by one cent.
I give him credit for trying hard to cut spending. I am one Democrat who thinks the toll road lease, while poorly worded and negotiated, was, overall, a plus for the state.
But as someone who watched the sales tax increases over the decades, I can tell you this: no good comes from it. It’s like feeding an addict heroin. Unless you cut state spending somewhere, it’s enabling.
The 1973 sales tax doubling led to the creation of the Property Tax Replacement Fund. Otherwise known as the Indiana Legislators Poor Budgeting Enabling Act.
You’ll have to search far and wide to find a piece of stupider legislation.
In short, it gave legislators a pool of money to “claim” they’d lowered our property taxes for almost 36 years.
How’s that working out for ya?
So, Mitch cnanot claim he balanced the budget without raising taxes. It is not true.
But I still like the ad.
May 13th, 2008 at 9:21 am
I just don’t understand how anyone with a reasonable sense of integrity can talk about voting for change against Daniels when what we had for 16 years of democrat control was basic inattention to reality. I can only assume that these folks are suggesting that we go back to the old, do nothing but spend, ways?
May 13th, 2008 at 9:49 am
I’m a Democrat. Jill L-T cannot beat Daniels. She will lose by a margin of ten points. You read it here first. Abdul: time to get your old polls off the screen.
May 13th, 2008 at 11:18 am
The toll road was a great deal for the state, it really was. However, it irrevocably screwed every person in Northern Indiana who formerly did not have to pay for interstate useage. If Gary, South Bend, and Angola went under the block this time, who’s next?
May 13th, 2008 at 11:30 am
I agree with Greg. We were six months from bankruptcy when Gov. Daniels took over after 16 years of bad management. When tough decisions are made, invariably some will be hurt by those decisions. It is Mitch Daniels’ job to do what is best for the entire state, as if the state is a single business entity. I urge my fellow hoosiers to the north to quit their whining. The state needed the money now, rather than the 50 years it would have taken to collect the funds in tolls. Mitch, most definitely, deserves a second term.
May 13th, 2008 at 11:33 am
Greg, I tend to agree with you. If my memory serves (which happens less and less) Indiana was in the black, then the democrats took the Governors seat and for the next 16 years we were suffering from, as you said, “basic inattention to reality.” Which put the state in the red until Mitch took over. Now, if we could get the government to quite wasting our money we could get taxes under control and make Indiana a place, once again, where people want to move to.
May 13th, 2008 at 11:36 am
Yep, we got a 1 cent sales tax increase and still no idea what (if any) property tax relief we will have. I do know that the assessment went UP on my property by $30,000 in spite of the fact that the property values statewide have declined 8% - 12% or so.
May 13th, 2008 at 11:52 am
Except for, you know, when it was running a surplus under Evan Bayh, and when it was running the largest budget surplus in state history under O’Bannon.
May 13th, 2008 at 2:11 pm
Here is a link to a Purdue site showing the State budget balances running up to when Mitch came into office.
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http://www.agecon.purdue.edu/crd/Localgov/Second%20Level%20pages/State_bud_handout.pdf
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The key numbers are that 1998, 1999, 2000, 2001, 2002, and 2003 (estimated) are all budget deficits. There was still a small amount of cash in the bank, but that was running out very quickly. There was the famous “rainy day fund” that was also being depleted. You might also remember that the State was horribly behind in its payments to the schools.
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As I recall, even under Bayh, the Rainy Day Fund was disappearing.
May 13th, 2008 at 2:19 pm
The Purdue budget figures do not take into account some basic economic facts:
The state delayed or sped-up some payments, particularly to school corporations, to balance books. Regularly. Over about nine years.
And, income from the Federal Highway Trust Fund is not considered in that reconciliation, but, the expenditures are. And they were huge.
But then, Purdue folks never were budget geniuses.
Just kidding on that last one…
Liars figure, and figures lie, ya know?
May 13th, 2008 at 2:28 pm
Yes, the state was delaying significantly payments to the schools.
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Do you have a link to more accurate numbers? The key number seems to be the bottom line which was (for all intents and purposes) cash on hand. My recollection was that those number, if not exactly right, were trending in the right direction.
May 13th, 2008 at 4:59 pm
BrianK
May 13th, 2008 at 11:52 am Which put the state in the red until Mitch took over.
Except for, you know, when it was running a surplus under Evan Bayh, and when it was running the largest budget surplus in state history under O’Bannon.
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Think Again
May 13th, 2008 at 2:19 pm
The Purdue budget figures do not take into account some basic economic facts:
The state delayed or sped-up some payments, particularly to school corporations, to balance books. Regularly. Over about nine years.
And, income from the Federal Highway Trust Fund is not considered in that reconciliation, but, the expenditures are. And they were huge.
But then, Purdue folks never were budget geniuses.
What world do you liberals live in?
May 13th, 2008 at 7:40 pm
In November we will see what a great job Mitch is doing. His ad is B.S. just my opinion
May 13th, 2008 at 10:17 pm
Mitchie the Kid has done a fabulous job and deserves another four years. If leasing the toll road was so bad WHY are other states looking at doing the same thing?
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The first comment from captain obvious says it all.
May 13th, 2008 at 10:49 pm
i’m a long time democrat and i will be voting for governor daniels. is his personality and style easy to like? no. do i think he is as folksy as he wants us to believe with the ballcaps and all? no.
does he have the state squarely in the black while allthose bordering us are broke? yes. even though he was one of the many reasons for the fiasco, did he step up on property taxes? yes. are services better than they had been in years? absolutely.
i have no idea what change jlt wants that would improve the state right now. the nation is in a recession but mitch is keeping indiana stable.
i suppose if you really, really hate daylight savings time, that’s a problem. on the other hand, i was walking with my children through the neighborhood at 8:00 pm tonight watching my neighbors be productive in their yards. love it. thanks governor.
May 14th, 2008 at 2:18 am
What does the Indiana State Constitution say about the responsiblilities of the the executive branch (govenor)? Just curious.
May 14th, 2008 at 6:38 am
With the new ads you see on TV from Mitch Danials campaign there is some disagreement with the ditch Mitch crowd about taxes.
Yes we did have some tax raises:
Increase of the cigarette tax: To provide health care to children. Now I don’t know why they are blasting Mitch for this. I personally did not like this tax increase.
His advocacy of local income tax increases: Bart Peterson spend $300,000 to get this tax passed. As far as Danials backing it, it would take more pressure off the state to bail cities out. Of course none of use were for this tax increase.
Raising of the sales tax by 17% : It was my belief that most citizens was for this tax raise to level off property taxes. It will take sometime, about three years, to see what effect this will have on your property tax relief. But in the end, by 2011, you will see property taxes go down to the 1% cap. That is if the property tax bill stands as it is today.
May 14th, 2008 at 8:07 am
My. Myers:
Your rewriting of history is convenient, but allowable, I suppose…partisanship is rampant this time of year, and it’s to be expected.
But nowhere–not even on the thin-air of McCainville–can you escape this fact: our sales tax was increased from 6 cents to 7 cents per dollar.
That is a huge blow to anyone buying big-ticket items: appliances, cars…
It is a devastating blow to the economy. Every sales tax increase in Indiana history–every single stinking one–has not helped the economy, and was not ever repealed.
I do give Mitch credit for trying to cut the state bureaucracy.
But this myth of no new taxes is just insane. I might even agree that as taxes go–a pure consumption tax (sales), with food and drugs exempted, is probablky the least harmful short-term.
But it IS a tax increase.
May 14th, 2008 at 9:54 am
This “property tax relief” is just history repeating itself. For decades our politicians have raised taxes with the promise of lowering the property tax. And as history has shown property taxes go right back up in a few years. Bottom line…we’re screwed. Same thing is going to happen again this time. The 1% percent cap is not a cap when your property values are inflated to make you pay more taxes. Proof positive is the Meridian-Kesslar neighborhod. My assessment has doubled since 2005, and this is in a down market. Point is they are going to get our money one way or another while calling it “relief.” Bill Styring’s solution is the real answer. It is the only way to keep government from telling us one thing (relief) and doing another (making us pay MORE taxes). And lets not forget that we are paying taxes on an unrealized gain. Do any of you pay taxes on stocks you own? Than why do we pay taxes on a value that is not realized and one that is arbitrary at best?
May 19th, 2008 at 12:53 pm
Abbie,
Regarding Mitch’s “I solved all of Indiana problems” political commercial.
I was at Giest Reservoir this past weekend. And guess who I saw walking across the water…Gov. Mitch Daniels. It was incredible. Then when he was done, he fed the masses with a few fish and a few loaves of bread. I wonder why he did not put this in his commercial?