Posted by
Rich from NW Indiana on Thursday, September 21, 2006 6:12:48 PM
Whenever the subject of high taxes comes up, I get interested. Taxes kill the growing economy, the higher they get the worse it is. Let me tell you the story of property taxes here in Northwest Indiana.
BP (formerly Amoco) has a refinery here in Northwest Indiana. It is over a hundred years old. It takes up half of the city of East Chicago, and also large parts of Whiting and Hammond. It is one of the biggest employers in the "Da Region". It has provided high paying jobs for as long as anyone can remember.
Five years ago when BP took over Amoco, it gave the oil giant, ten or eleven refineries in the U.S. When their bean counters started counting, they discovered that the refinery in East Chicago was paying more property taxes then ALL the other refineries combined. Yes, all ten or eleven. Ouch! Of course they were. It paid for all the bloat in East Chicago city government (I could write a book on that).
If you know anything about city government in East Chicago, it still has the Democrat machine working hard at spending huge amounts of money. Back then Amoco paid for it all. Homeowners were paying small amounts or nothing in property taxes. East Chicago (don't you love the name of this city) has about 30,000 residents and over 2,000 city employees (that doesn't include the school district). Most residents are low income, immigrants and a lot of older blue collar people. So not a wealthy community in any way, but the most expensive city government in Indiana (maybe the US as well).
Never the less Amoco hadn't invested any real money in the refinery in many years. I fully thought that refinery was on borrowed time. BP would give up and close it down, but it isn't to easy to replace refineries nowadays.
Property tax reform is a hot issue here in Northwest Indiana. There has been heated discussions in meetings at my real estate office on that. What is different in the last few years was what happened and who did it. A homeowner in the suburban area in Northwest Indiana started it by suing the state and county for property tax reform. The large (and small businesses) quickly jumped in on that suit.
What happened was the property taxes were shifted more equally onto residential property. It has lead to huge tax bills for many people in the north part of the county who were used to paying little or nothing. The Democrats of course sing the folly of that happening, just the little guy getting shafted by big business again. There of course needs to be a better solution to that problem of high property taxes on those homes. But alas, the big spending gets in the way. We will see if that is
fixed or not but that hasn't been solved yet.
But look! BP is going to invest
three billion in the refinery. Would that have happened five years ago?
NOT A CHANCE! It beat out a refinery in Texas for the upgrade. When you take the question of taxes out of economic decisions a company (or a person) can make a choice on the other points. The TAX RATE DOES MATTER!