By Bill Styring in the Indianapolis Business Journal:
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Doc’s name will forever be tied to property tax replacement. His whole 1972 gubernatorial campaign was a pledge to produce “substantial, visible and lasting” property tax relief. In the 1973 Legislature, Doc got that done.
The price was high. He doubled the sales tax from 2 percent to 4 percent and used the new money to give an across-the-board 20-percent property tax credit.
A little-known, behind-the-scenes deal was that, to buy enough Democratic votes in the Senate, he had to agree to give public schoolteachers collective bargaining, a trade he would later privately lament.
Doc promised that the new sales tax revenue would all—well, almost all—go for property tax replacement. Voters are always skeptical of any political pledge to “let me raise this tax so I can cut this other tax,” fearing rightly that the result will be tax X indeed goes up, but tax Y never goes down.
Doc delivered on the tax X up and tax Y down for as long as he was in office and could control events.
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The “lasting” part of “substantial, visible and lasting” proved more ephemeral.
Doc’s property tax controls were all statutory. Future legislatures could undo them. Without Bowen around to veto, they did just that.
By 1987, property taxes were back above their 1973 levels and headed higher.
Lesson: If you want property tax increases lastingly limited, put those limits in the state Constitution, where future legislators will find it hard to tinker.
Mitch Daniels learned that lesson from Doc. Daniels’ property tax limits are ensconced in the Constitution.
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http://www.ibj.com/article?articleId=41607
