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Government and Fiscal Policy

LWVIN  | Published on 1/1/2020


Government and Fiscal Policy



Local Government

LWVIN supports the following principles of local government: 

Representative and participatory: LWVIN supports strategies that promote diversity of representation and civic participation, information that is complete, clearly presented and accessible; services that are accessible; and citizen input and review of all policy making. 

Efficient and effective: LWVIN supports local government organization and processes that direct dollars to the improvement of services instead of excess administration. Intergovernmental cooperation should be an essential element of governmental processes. 

Transparent, accessible and accountable:LWVIN supports local government that is transparent and with elected and appointed officials accessible to the public. Officials who make policy and levy taxes should be accountable to the voters. Officials who administer policy are accountable to the elected officials who appoint them. 

Flexible: LWVIN supports choices for counties, cities, and towns in the ways they organize and administer their structures and functions within guidelines set by the state. 

Fair and equitable: LWVIN supports fair and equitable processes and services.

Continuous improvement: LWVIN supports provisions for the continuous improvement of governmental processes including, but not limited to: technical assistance, qualifications for and training of personnel, standards, evaluation, reporting, data collection, and research.

Local Government Finance

Local government units should be allowed to use a mix of taxing options or alternatives, in addition to equitable property taxation, for financing local governmental operations. 

There is a need for flexibility in funding services at the local level. Local government units should have the ability to choose the most appropriate remedy, as established by law. 

Local government units depend on and need a program of state fiscal support including, but not limited to, distribution of taxes collected statewide as well as state general fund surpluses. State funds should be used to compensate local governments for taxes not paid on tax-exempt state property and for state-mandated local programs. 

State government should enable a variety of local option income taxes that allow increases in local revenues for purposes other than property tax replacement. These taxes may be levied on both personal and/or corporate income. When a county adopts such a tax, it should apply to all income generated in that county, with no credits given to either residents or nonresidents. 

The townships’ annual financial and budget estimate reports each shall provide specific, uniform information that accounts for the costs of all functions, including administration, as well as for amounts in financial reserves. 

Property Tax Exemption

State property tax exemptions, deductions, tax abatements and TIFs narrow the tax base of local governments, burden non-exempt properties and/or cause reductions in services offered by local governments. They should be granted fairly, equitably and sparingly. (“Tax abatements”: taxes on new investment phased-in over a number of years; “TIF”: if an area is designated a Tax Increment Finance district, property taxes generated from new development can be set aside and invested back in the area to promote development.) 

Each county auditor should make available to the public the names, assessed values and purposes of organizations and businesses whose property is tax-exempt. The auditor should post property tax information on the county website. 

Owners of tax-exempt properties should make payments in lieu of taxes for services provided them by government. 

Property tax relief for persons should be based on economic need, should be given uniformly, and should be financed by the state.

Tax System

Support of a broad-based, equitable, efficiently administered tax system which provides adequate revenue for Indiana’s budgetary needs. 

Members of the League of Women Voters of Indiana believe a tax system should be broad-based, equitable, easily understood, and efficiently administered and should provide adequate revenue for Indiana’s budgetary needs. 

To achieve these goals, the League supports the following measures: 

  • An individual income tax which is progressive for all income levels.
  • Graduated rates of income tax are progressive, proportionate to income, but Indiana’s current flat rate for individuals is not. The League of Women Voters of Indiana supports progressivity because it helps to equalize the tax burden among those with different incomes, not putting a greater share proportionally on the poor. It builds into taxes the ability to pay.

Therefore, the League strongly advocates that the Indiana income tax should be made progressive, with the introduction of graduated rates. The league believes that individual income taxes should be restructured as soon as possible to this method of taxation. 

The actual graduated rates should provide, at the least, the same total income to the state as current income taxes do. 

The League of Women Voters continues to oppose any reduction in Indiana personal income tax revenue. 

Assessment of all real property at frequent, regular intervals, at the same effective percentage, using adequately trained personnel and up-to-date procedures. 

The League finds that, over and over, Indiana tax problems stem from inadequacies of administration, especially of assessment. The League urges state and local governments and legislative groups to work further to resolve these problems. 

Because the League of Women Voters of Indiana prefers taxation based on income and the ability to-pay, the League favors changes in local property taxation in the direction of equity and fairness. The League favors the transfer of some responsibilities of government from the local to the state level, with consequent reduction in local property taxes and replacement of the funds from state revenues. The League supports full state financing of public welfare. It also favors relief on local property taxes by shifting responsibility for much of the financing of public education to the state; however, it also supports retention of some funding responsibility for education at the local level so that some degree of control of schools can be maintained at the local level. 

The LWVIN strongly advocates replacing any lower local property tax collections with increased collections from a state graduated income tax. The League takes the broad position that the mix of taxes used to fund all state and local government should be changed in favor of heavier reliance on a state graduated income tax. 

The League favors the replacement of revenues lost from local property tax relief for businesses through an increase in state corporation income tax and other taxes on business. The LWVIN does not favor rescinding the Corporate Gross Receipts Tax. The League supports the elimination of the inventory tax, action requiring a constitutional amendment. Until such an  amendment could be approved, the League favors reduction of the inventory tax and its replacement by other taxes on businesses. 

Because of the possibility of substantial increases in residential taxes with a “market value” system of property assessment, the League supports a “circuit breaker” system in market value assessment, which will protect low-income taxpayers whose property has appreciated in value. 

School Finance

The League of Women Voters of Indiana believes that public school funding should guarantee equal access to basic, high quality education for all Indiana children and recognition of State responsibility for attaining this goal.  To achieve this goal, the League supports a foundation program for funding public elementary and secondary schools.
 

The League defines a foundation program as a state-regulated system (1) which provides for standard, basic, high quality education for all Indiana children regardless of their place of residence; (2) which is appropriate for each child’s individual potential and circumstances; (3) which is financed by a mix of local and state funds; (4) and which provides fiscal equalization, i.e., a minimum local tax effort is required by state legislation, and state tax revenues provide sufficient additional funds to pay for the foundation program. 

The foundation program should include:

  • Provisions for incentives to improve education
  • Weights reflecting the added per pupil costs for equalizing educational opportunity for children who are economically disadvantaged, physically handicapped, or in other special circumstances.
  • Provision for additional costs resulting from special circumstances of the school corporation itself.

The total foundation program funding should be set at a level high enough to provide all funds needed for school corporations to pay for high quality education. This includes teachers’ salaries which are competitive within the field. 

After the foundation program has been set at a level high enough for a basic program and has been fully funded, the League supports other funding mechanisms which allow school corporations to provide for local needs and interests by additional limited local leeway funding.

The League of Women Voters of Indiana supports:

  • An over-all increase in the level of education funding of Indiana’s public schools. 
  • The concept of state taxes paying, on the average, three fourths of public school operating 
    expenses (those costs other than construction costs, debt service, and transportation).
  • Transportation funded separately by a mix of state and local taxes. Complete funding of costs 
    over the foundation level for state mandated programs. 
  • Methods of public funding of schools which (1) are simple, predictable, and stable, allowing for efficient planning; (2) are flexible and responsive to local needs and/or choices; (3) and provide incentives for creative efforts among school corporations and innovative approaches to problems. 
  • A method of public school funding which eliminates extreme variations in level of per pupil 
    expenditures, allocating funding so that each child receives relatively equal support, with 
    consideration given to area differences in cost of living. 
  • If additional tax revenues are needed to supply the state’s share of an adequate foundation 
    program, the League favors use of the statewide income tax.

The League opposes the diversion of public funds to nonpublic schools, for example, through vouchers, tuition tax credits, tax deductions, or choice scholarships. 

The League no longer opposes the use of tax referenda to increase local school funding.