Out of Chaos Comes... More Chaos?

The Indianapolis Star today had a wonderful article on property tax reform. In short, there hasn't been any. A failed system has been replaced with a new failed system. The Indiana Fiscal Policy Institute, which produced the study found a litany of failures and noted that 85% of Indiana counties still had a wide disparity between what houses were appraised at and what they actually sold for.

In some counties, this helped for the better, but in others, it's caused nightmarish increases in property taxes, with ach horror story accompanied by the salving sentence "But at least things are now more fair and equitable...". That, in case you haven't heard it, is the war cry of the oppressor. Sounds positively Marxian doesn't it?

The IFPI's study found several key things wrong with the system, taken from the Star's coverage:

• Wide disparities exist from county to county, and even within counties and townships, between the assessed valuation of a property and what it sold for.

• There is a lack of uniformity in how assessments are made and inconsistency in how rules are applied.

• Often-incomplete records vary from county to county, and state rules are ignored, making a market-value tax system difficult to achieve.

They also suggested several potential fixes:

• Eliminating all 1,008 elected township officials who handle assessments and replacing them with appointed professionals.

• Moving primary assessment responsibility from the township to the county level.

• Enforcing compliance with statewide assessment data standards, with financial penalties for failure to comply.

Those sound good, except that the reality of them and the logistics would be rather difficult. Transferring whole layers of bureaucracy from local to county level, putting in merit personnel instead of elected officials and enforcing a set standard seem on the surface all very winnable ideas.

The reality of it will likely be a bitter fight against entrenched politicos ending in most of those individuals keeping their jobs and becoming the "professionals" at the county level, perhaps with a salary boost and obviously increased staff to handle their "professional" needs. No savings there. The uniform standards sound good, until of course you take into account that certain homes and certain areas are going to break the rules set no matter how they try to structure them. This will generate whole new encyclopedias of rules and subrules and addendums and post-its that will keep property tax evaluation a byzantine and somewhat unfathomable system for many years to come, at least until the next wild-eyed reformer sets his sights on it.

There is another crazy idea, that of eliminating property tax altogether and the massive bureaucracy it supports. I've said it before. Property tax funds going into the government are like providing in a main line to a junkie. There is no incentive for them to curb its use. It's a ready flow of cash, and if they want more, the mechanism is already in place to just raise it a little. And if you refuse to pay, YOU'RE the criminal, and you can lose that property to... drum roll... the government!!!

There are other alternatives to property tax, and several states have such programs underway. Like methadone for a heroine addict, it's not a panacea, just a lesser addiction. But it's a start, and as I've said before, property taxes have to go. We're not serfs. We're land owners. It's a fundamental right of owning your own land that it is your land. The property tax bureaucracy distorts and erodes that right by its very existence. The best way to reform property taxes in my humble opinion, is to cut it off at the root, use weedkill, then salt the earth where it grew.