Commentary by Dwight Lile
In a Feb. 19 letter to Indiana’s Republican county chairmen, Speaker Brian Bosma and Senate President David Long joined in an effort to persuade Republican leaders that bigger budgets are better. The facts do not support his conclusions.
Mr. Bosma presents a false choice to his constituents, which is simply this: unless we expand the budget, we can’t improve roads, increase educational funding or expand infrastructure.
Really?
What if we spent a reduced amount of money in different proportions? We could, for instance delete the $20,000,000 horse racing subsidy or the $100,000,000 that the Indiana finance authority will divert from tax receipts to repay a bond used for the redevelopment of the Indianapolis Motor Speedway. Racing and gambling are not more important than roads and schools.
The Speaker reveals in his letter that he has advised the Governor “to keep our (budget) discussions in his office… as we successfully did with Governor Daniels.” The Speaker also expressed his dismay that, “our members are now faced with public discussions at Lincoln Day Dinners and with our party leadership…” Of course, keeping negotiations behind closed doors means keeping Hoosiers in the dark. Isn’t the state’s budgeting process every citizen’s business?
Perhaps Mr. Bosma has such infallible insight that he doesn’t need input from Indiana’s bothersome taxpayers as he rejects the Governor’s 10-percent personal income tax reduction. The Speaker does mention a list of tax reforms in his letter, implying that the tax changes he “championed” reduced our burden, but that is a misdirect. According to The Tax Foundation, Indiana had the 34th highest state tax burden of all states in 2006. We now have the 23rd highest. Our state tax burden has increased relative to the rest of the country. So, Mr. Bosma’s claim in his letter that, “Hoosiers now enjoy one of the lowest cost per capita state governments in the nation,” is false.
Speaker Bosma praises Indiana property tax cuts as if there were a “permanent” cap on rates. However, according to Tax Dispatch (Indiana Department of Revenue), Volume 11, No. 1, effective April 1, 2008, a change of Indiana’s sales tax rate (from 6 to 7 percent) was instituted “to offset the property tax caps.” It is also possible to circumvent property tax caps with a “Special Benefits Tax” levied on property when local fiscal units deem it necessary. The Special Benefits Tax has been adopted in Carmel so the property tax cap isn’t what the Speaker advertised.
Another claim by the Speaker is that “our income tax (is) the best in the nation among the 41 states that have income taxes.” However, it’s not the income tax rate that determines the total burden of government, it’s all state taxes combined. More than half the states have a lower total state tax burden. That makes our government efficiency slightly below average. Implying that the lowest income tax rate makes our tax situation “the best” is not accurate.
Mr. Bosma asserts “that the most important job of state government is to be lean, efficient, and most importantly, sustainable.” In contrast to that assertion, The Ways and Means Committee has asked for $1,000,000,000 (with Mr. Bosma’s approval) in additional taxpayer support while arguing that it is risky to approve a budget cut in these uncertain times. Planning to spend one billion dollars more while claiming a tax reduction of one half billion is not logical.
Permit one more observation about the art of argument: “Falsumin uno, falsum in omnibus,” literally meaning “false in one, false in all.” Mr. Bosma’s argument that more government spending is essential to Indiana’s well being is a false argument.
We need the Indiana State Legislature to put itself on a sustainable path with the Pence personal income tax cut and appropriate budget reductions. Since Speaker Bosma was elected in 1986, according to The Tax Foundation, Hoosiers have gone from paying 8.6 percent of per capita income to the state to 9.6 percent. Our personal incomes have declined. We have been taxed enough already. That’s the real truth.