Can we talk?
The Chamber of Commerce has been getting a lot of grief for championing a commuter tax to be paid by folks who work in Indianapolis and reside elsewhere. But the Chamber is right.
Some folks may still picture Indiana as a patchwork of small, quaint towns and family farms, but those days are gone. Indiana’s workforce and population are increasingly metropolitan. Indiana’s growth has been and will continue to be in our urban centers.
The entire state economy depends upon a strong, thriving Indianapolis. Much as our legislators like to ignore fiscal reality, Marion County, along with the state’s other metropolitan counties, is—and has long been—a donor county. Our taxes support more rural areas. (A report published by the Indiana Fiscal Policy Institute in 2010, identified the donors: in addition to Marion County, they included Lake, Allen and Vanderburgh.)
If we want to talk about “makers and takers,” Indianapolis is a maker, and rural Indiana is a taker. Big time.
Despite the GOP’s resistance to taxing most wealthy “makers,” Republicans in control of the Statehouse have continued to ensure that Indiana’s tax structure–which has historically disadvantaged the very areas that generate Hoosier jobs–will continue to bite the hand that feeds the rest of the state. The disastrous, politically-motivated decision to constitutionalize property tax caps has only made matters worse.
Here in Marion County, we are further disadvantaged by the large number of government and nonprofit institutions that pay no property tax. Add the tax caps and the exempt properties together, and we have a revenue crunch of massive proportions—one that cannot be relieved by reliance on the local income tax, or by naïve demands to “cut fat and waste.” We can all argue about the wisdom of certain expenditures (cricket, anyone?), but the amounts involved are—in the larger scheme of things—a drop in the bucket. We’ve cut fat, we’ve cut muscle, and we’re now into bone.
The foregoing are simply facts. Here’s the sermon: Government is not an irrelevant luxury. Businesses as well as individual citizens depend upon the services provided by municipalities—infrastructure, public safety, transportation, garbage collection and a myriad of other services that collectively comprise a city’s quality of life. If we want to continue receiving those services—if we don’t want to be Detroit—we have to pay for them. Taxes are not theft; they are the dues we pay for civilization. We cannot survive without them; the best we can do is ensure that government operates responsibly and that the “dues” we pay are fairly assessed.
That fairness is what has motivated the Indianapolis Chamber of Commerce’s proposal for a commuter tax.
More than two hundred thousand workers commute into Indianapolis each day. They use our streets, are protected by our police and firefighters, flush toilets into our sewers, and enjoy the other elements of the quality of life our taxes have provided, but they don’t contribute to their cost. They pay their taxes to the places where they live.
Paying taxes to the county where your income is generated is hardly a new and oppressive idea. A good number of Indianapolis’ peer cities around the country have adapted to the realities of regional economies and regional workforces. The Indianapolis Chamber has studied commuter taxes extensively, issuing reports in 2002, 2006 and 2007. Its current advocacy is informed by those studies and by the experience of other cities.
Every economic analysis of the Hoosier state confirms that the health of Indiana is inextricably bound up with the health of the Indianapolis metropolitan region. Starving Indianapolis—making it impossible for even the most creative public servants to deliver the services we all depend upon (and incentivizing “smoke and mirror” solutions that give away the store)—is simply not an option.