Watch out for a big new tax grab at the local level

Grab your wallets and purses. The Indiana Association of Cities and Towns plans to push for the Indiana General Assembly to give more taxing power to Hoosier municipalities next year.

The association, which represents 470 cities and towns around the state, including those in Jackson County, wants lawmakers to pass a law that would allow municipalities — not just counties — to adopt local option income taxes.

That’s not all, however. IACT also wants all cities and towns to have the power to levy a food and beverage tax or an innkeepers tax up to 1 percent. Jackson County already has a county innkeepers tax, assessed at 0.73 percent on hotel and motel rooms, and it assesses two income taxes — the county adjusted gross income tax at 1.1 percent and the county economic development income tax at 0.5 percent.

Do we really need city and town taxes on top of those?

We realize the folks running the local cities and town would likely think so, given the loss of property tax income and the growing cost of providing services to their residents.

And IACT contends the proposals would give their clients new income options to offset revenue losses from statewide caps on property tax bills.

Let’s hope lawmakers at the Statehouse will think long and hard about opening the door to more forms of taxation at the local level. As we recall, an idea behind the property tax caps was to ease the tax burden on Hoosiers. Allowing cities and towns to simply raise one tax after another to make up that property tax relief seems to just shift the burden from one pocket to the other.

Perhaps one saving grace — at least temporarily — is that next year is an election year for half of the members of the Indiana Senate and all of the House of Representatives. We may be able to count on self-preservation as a means of seeing that IACT doesn’t succeed with its plans, at least not in this next legislative session, which starts in January.

We think that before the General Assembly grants such taxing powers to municipalities, the folks who manage those municipalities for us should be taking hard looks at the services they provide and any cost-cutting measures they could make.