the three ghosts of property taxes

surely by now, most hoosiers have heard about the property tax fiasco, which has caused property tax increases throughout the state (and some particularly large increases in marion county). these increases have inspired several protests, which have also generated their own coverage.

doug, one of the cooler-headed commenters on this topic, explains how we got here:

The primary reasons for the high increases in property taxes recently are: 1) Elimination of the inventory tax - former inventory tax payers are paying less, so other property tax payers, including residential homeowners have to pay more. Counties were given the ability to implement a County Option Income Tax to offset the inventory tax reduction; basically you replace the revenue with income taxes instead of property taxes; 2) Reduction of the homestead credit and property tax relief credit - state subsidies that took the burden off of property taxes. These credits were provided out of a recognition that the state imposed large burdens on local taxes and also imposed significant restrictions on local taxing powers. These subsidies were reduced in an effort to balance the state budget and, effectively shifted the problem to local government and property tax payers; and 3) Changes in assessment rules - years ago, taxpayers brought a lawsuit arguing that the assessment rules unfairly and artificially underassessed some properties and overassessed others. The Supreme Court agreed and required something resembling market values be used for assessments. As a result the relative tax burdens shifted, with the underassessed property owners having to pay more and the overassessed paying less.

So, generally speaking, the dramatic rise we see in property taxes is less a matter of local government spending gone amok, and more a matter of shifting tax burdens. (You can expect those whose tax burdens went down to keep relatively quiet). Also, in some cases - such as, apparently, Marion County, this already difficult situation was made worse by failure to use available tools, such as the County Option Income Tax.

so there's plenty blame to go around, particularly for the state legislature (past and present) and the governor (who "balanced" the budget by reducing the homestead credit and other tricks to pass costs on down to local governments), as well as for local governments that failed to adequately compensate for the shortcomings of the governor and legislature (not to mention allowing their old tax assessment systems to go into disarray).

at any rate, the property tax issue has reawakened some political ghosts from the past. gary welsh and others speculate that professional gay-hater eric miller plans to run for governor in the republican primary, based largely on a platform of property tax reform. perennial libertarian candidate andrew horning, who switched to the GOP in 2004 after losing too many elections as a libertarian, only to lose yet again as a republican, has come back into the public spotlight as a representative of americans for fair taxation. the "fairtax" folks want to eliminate property taxes (one of the most progressive taxes we have) and replace them with increases in sales tax (one of the most regressive taxes out there) and income tax, which doesn't sound even remotely fair to me.

but possibly the most surprising figure to reemerge as part of the property tax debate is melyssa "miss ann" donaghy, the mkna dominatrix who publicly feuded with the mayor back in 2005. miss ann had been quiet: her blog, which she started last summer, hasn't had a post since january, and the front page of her website currently returns a blank white screen. (but the other documents still seem to be there if you know where to look.)

i first noticed miss ann was involved when i read this comment at advance indiana, where she claims to be one of the organizers of the july 4th protest in front of the governor's (non)residence. while i was a bit puzzled by the comment (more on that in a moment), i didn't post about it because i didn't want to write some sensationalist post about "dominatrix organizes protests!" i figured, she deserves her privacy and should be able to be politically active without her past(?) as a dominatrix coming into it.

however, now the star's tim evans has done it for me:

[Eric Miller's] background and approach are a far cry from those of Melyssa Donaghy, a dominatrix who has tangled with city officials over the alleged activities that took place in the basement "dungeon" of her Meridian Kessler home.

Donaghy, who is associated with Hoosiers for Fair Taxation, has whipped up support for the protests through e-mail messages and blog postings. She also pedaled a bicycle around her neighborhood, knocking on doors and talking to anyone willing to listen.

"Melyssa did a lot of work to get this ball rolling," said Andy Horning, who ran for mayor and governor as a Libertarian, then ran for Congress as a Republican. Horning has also been active in the anti-property tax movement.

Donaghy did not return a call Friday from The Indianapolis Star but has sent the newspaper notices about rallies.

Miller said he has been in communication with members of Hoosiers for Fair Taxation but said he had not met Donaghy and was not aware of her background.

i'm not going to criticize tim evans for writing the story, because when a moralistic high-falutin' fusspot like miller becomes somehow associated with a professional dominatrix, it's good to call up that fusspot and get a comment. but i will say that i'm glad i wasn't the one who broke this story.

anyway, getting back to that comment miss ann left over at AI. miss ann has good reason hold a grudge against mayor peterson, considering that the mayor held a press conference back in 2005 to brag about shutting down her business. i'd probably still be pissed if he did that to me, too. but i have to wonder whether that grudge might be tainting her opinion on this subject. note how she fawns over governor daniels and hisses at mayor peterson:

I appreciated the message from Governor Daniels that we picked the appropriate day to hold the event. I also hope our Governor understands we picked the Governor's Mansion because it is the symbolic home of Indiana and it is our very homes that are being threatened by Peterson's runaway spending and inefficiency.

We came to the Governor because we believe he cares and will be moved when he sees the will of The People for the Indiana Fair Tax. We also know the Governor has the wearwithall to push hard agendas forward.

The next event is the city council public hearing on July 16 at 5:30. You can get the ball rolling now by contacting your council persons to demand that they vote against Bart Peterson's Income Tax hike and by voting AGAINST Peterson at the next election.

If our council persons were on the ball they would be pushing a proposal to do a thorough audit of city-county government STARTING with the wasteful and expensive political agendas of Bart Peterson.

if anything governor daniels is more responsible than mayor peterson for helping cause the property tax increases. (to be sure, mayor peterson could have done more to work with fellow democrats in marion county to fix up the assessment system and prevent property taxes from going up as much as they did, but he still would only have been reacting to tax increases forced upon him by the state. the mayor does deserve some of the blame, but he's at best third or fourth in line for responsibility for this mess.) yet miss ann & friends "believe" the governor "cares and will be moved when he sees the will of The People for the Indiana Fair Tax". (it goes without saying that they do not believe mayor peterson cares.) and even though this is a statewide problem, the way to "get the ball rolling" to fix it is by opposing peterson plans and "by voting AGAINST Peterson at the next election." somehow i don't think that will help the people in elkhart or switzerland counties.

but most puzzling of all is the claim that they chose to protest in front of the governor's mansion not because people are angry at the governor (heavens no!), but simply "because it is the symbolic home of Indiana and it is our very homes that are being threatened by Peterson's runaway spending and inefficiency."

it seems to me that if you want to protest the mayor but not the governor, maybe you should go, say, someplace associated with the mayor. at least go downtown and protest at the circle (which protestors will do tomorrow, after 2-3 protests at the governor's [non]residence). of course, signs say that hoosiers are angry with the governor... and they're also angry with the legislature, local officials, and the business community, who all contributed to the problem in their own way. these are turbulent times, but i'm not convinced that the mayor's reelection is in peril.¶