Hinkle Continues to Push for Property Tax Elimination

(posted Sept 29)

State Representative-District 92 Phil Hinkle is still pressing forward with the proposal to eliminate property taxes. Hinkle has been talking about the need to abolish property taxes for more than a year now as a solution to property tax reform.

"It is time to get on my pulpit and start preaching," he quipped to about 30 people at his September 27 town hall meeting. Hinkle recognized that other property tax relief plans would be circulating during the general assembly. He noted that a compromise of eliminating just residential property taxes is also circulating, but he said before he would support a tax plan it would have to meet his criteria called "BIPS" (Bold, Immediate, Permanent and Simple.)

Hinkle said the state legislators can't take blame for the total shake up in the property tax situation when the general assembly phased out the business inventory tax starting 6 years ago. The business inventory tax was finally phased out in 2007 which lead to skyrocketing residential property taxes. He said that Marion County neglected to offset the loss of the inventory tax by instituting other existing taxes to offset the loss. Forty-three counties instituted other taxes such as the Economic Development Income Tax throughout the six years instead hitting taxpayers with one lump sum. He said City County Councilor Ike Randolph's proposal to examine the loss of inventory tax was ignored in 2004. The council had the option of gradually increasing the county option income tax rate during that time to lessen the increase in property taxes. Wayne Township alone lost $289 million in inventory tax in 2007 that had to be made up by residential property owners.

Some constituents at the meeting complained about the businesses that lease property from Indianapolis International Airport are tax exempt.

Hinkle explained that Indianapolis International Airport is one of few airports in the country that is not operated by property taxes. The IAA operates the airport through lease back arrangements. Hinkle credited former IAA Executive Director Dan Orcutt with creating the concept of lease back arrangement as a source of funding.

On September 28, Orcutt explained the City of Indianapolis created the Indianapolis Airport Authority because it was no longer able to fund it with the debt cap in place.

The City County Council gave the IAA the ability to levy taxes to run the airport but the IAA intended to operate the airport with out the use of property taxes and started slowly phasing the tax assessment out while trying to fund operations through a self sustaining lease program. The IAA decided to let developers construct site improvements and enter into leasing agreements. He said the City of Indianapolis set the leasing precedent with the first development of an airport hotel, and the IAA continued with the policy. The City County Council leased the property to the Hilton to build a hotel back in the 1961 because no hotel existed. "All of the hotels were downtown. It created problems for the flight crews having to drive 20 minutes. There was no interstate at the time," he said.

He said the IAA began to look at services that airport passengers needed, so they began to attract car rentals, eateries, and gas stations. He also noted as the airport began to expand its operations and flights, surrounding residents complained about the noise and asked the IAA to buy them out. The noise mitigation buyout program further removed more property from the tax rolls. He said the IAA is now in the process of trying to return some of its property on Minnesota Avenue to the tax base.

Others complained that the IAA is not moving fast enough and the properties that it continues to own outside of the airport proper should not be tax exempt to those businesses leasing from the airport. Wayne Township Assessor Mike McCormack continues the fight to assess these properties to be placed on the tax roll.