ISTA Gives Thumbs Down to Governor's Tax Plan

Representatives of the Indiana State Teachers Association have announced the ISTA's opposition to a plan, announced last month by Governor Mitch Daniels, that would eliminate property taxes as a source of school funding revenue, and would have the state pick up the schools' general fund tab entirely (they already pay 95% of these costs) using a sales tax hike to pay for it.

ISTA representative Dan Clark offered two reasons for this position.
1) State funding of schools would mean that in times of fiscal shortfalls, schoolchildren would have to compete for scarce state budget dollars with other funding priorities.
2) The property tax is actually pretty useful in its dependability. Because it's less subject to economic fluctuations than the sales tax, you can always depend on it to bring in enough money to pay for needed services, even during the hardest times.

Both points are legit. Indianans need look no further than Wisconsin to see the dangers of states deciding they can afford to pay for an adequate education themselves. Wisconsin has had perpetual trouble living up to their guarantees they've made for assuming the lion's share of school funding costs. And the level of state funding has been a political football even in the good times.

And it's absolutely true that property taxes are a more stable funding source than sales taxes. That is, of course, one of the things that makes people mad about property taxes-- if you lose your job, your property tax bill will still be in the mail next year-- but the glass-half-full way of looking at it is that this is a tax base that isn't going to disappear anytime soon.

There are other reasons to be concerned about the Daniels plan. One could ask why the state wouldn't harness progressive personal income taxes as a way of bankrolling a state takeover of local school funding. And there are basic question of local autonomy and local control that should give any school-age parent pause.

But Clark and the ISTA are right on the money on this one.