GOSHEN -- The fix to the ongoing property tax flap might be an increase in sales and income taxes and an end to the use of property taxes to fund school operations and state social services, some area officials say.
Elkhart County officials pitched the notion last month and a group of leaders from St. Joseph, Marshall and LaGrange counties expressed preliminary support for such a scheme on Wednesday.
"It seems like it's antique," Phil Curtis, a LaGrange County commissioner, said at a "summit" here of officials from the four counties, alluding to the state's current taxation system. "We need to overhaul it."
At the same time, the county officials:
* Dismissed the notion of banning property taxes altogether, another idea that has gained traction among some as homeowners statewide wrestle with spikes in their tax bills.
* Rebuffed suggestions that county and local government spending is out of control, indicating that there's limited room to trim spending at the level required to help address the property tax crunch.
* Floated the idea of reducing available property tax exemptions to spread the burden of such taxation more broadly.
The leaders hope to formalize their proposals into some sort of official pronouncement and also get their counterparts from LaPorte, Porter, Kosciusko, DeKalb, Noble and Steuben counties to sign on. Then they would pass along the ideas to Gov. Mitch Daniels and other state leaders.
"Let the governor know what we're thinking up here in the northern part of the state," said Jack Roose, a Marshall County commissioner.
Because of changes in the land assessment process, state officials expect the value of the average Indiana home to jump by 24 percent this year, resulting in spikes in many homeowners' property tax bills. That, in turn, has reinvigorating calls for moves to temper dependence on property taxes.
The county officials on Wednesday noted that schools, in particular, use an inordinate amount of property taxes and zeroed in on them. Roose, for one, charged that schools are "unrestricted as to how much they can spend."
Mike Yoder, an Elkhart County commissioner, said corporate income taxes, in particular, could be tapped to help fund schools.
None of the officials Wednesday, however, estimated how much sales or income taxes would have to be increased if schools and state social services stopped receiving funds via property taxes.
Whatever the case, Elkhart County Auditor Dave Hess warned against raising the sales tax here so high that it would prompt retail leakage into bordering states with lower sales tax rates.
Hess also said any increase in sales or income tax would best be coupled with removal of at least one type of government service from the property tax stream altogether.
If increases are only coupled with a decrease in the amount of property taxes dedicated to a particular government service, he warned, the risk is that the reduced property tax level will creep back up as in years past.
Formation of a special commission by Daniels to look into the idea of reforming, consolidating and streamlining local government also figured in the conversation Wednesday. But Yoder questioned such efforts, saying that eliminating township assessors, one proposal that has surfaced, would save only "pennies."
Meanwhile, the notion of eliminating property taxes altogether drew no supporters.
"I don't see how," said Jan Quivey, the Marshall County auditor, contemplating a world without the funding stream. "You can't do it all on an income or sales tax.