In 1852, Indiana passed its first property tax levy to support local schools.

Since then, the state’s tax structure has grown in scope as well as complexity. Many feel taxation has spun out of control, and state officials from the governor on down are working to reform Indiana’s entire system of government.

In October, Gov. Mitch Daniels presented his plan to reform property taxes during a televised address. On Dec. 11, the Indiana Commission on Local Government Reform released a study calling for major adjustments in the governmental structure.

“I support the thrust of this very much,” Daniels said of the report. “You want to know why property taxes are too high, here’s the answer. You want to know how we’re going to get property taxes down and keep them that way; here’s the road map.”

Throughout its history, taxation has been critical in shaping the identity of Indiana.

Currently, a mixture of sales tax, state personal income tax, state excise tax, corporate income tax and license fees support state government. Property tax is the primary funding stream of local government and schools.

“Throughout the 20th century and now into the 21st, taxation has been and continues to be, critical to the structures of wealth and opportunity in the United States,” said Ajay K. Mehrota, associate professor of law at Indiana University.

The early days

What we now know as Indiana was part of the Northwest Territory — which included Ohio, Illinois, Michigan, Wisconsin and part of Minnesota — until 1809. On June 29, 1816, Indiana adopted its first constitution and was admitted to the union as the 19th state on Dec. 11, 1816.

In its early days, Indiana sacrificed some of its assets to benefit the state as a whole and, eventually, the entire region.

“An early example was the 1821 act creating an ambitious state highway system: two dozen roads to link all parts of Indiana to the new capital at Indianapolis, paid for by the sale of public lands. The law’s purpose was both democratic and economic,” wrote David J. Bodenhamer and Randall T. Shepard in their book, “The History of Indiana Law: Law Society & Politics in the Midwest.”

In 1880, the state’s population had reached nearly 2 million, and the ensuing 20 years would see the creation of numerous state agencies. Examination boards were created, licensing boards, a natural resource conservation agency and social health and welfare agencies.

Transportation would continue to be a central focus of the state, which officially adopted the motto “The Crossroads of America” in 1937. In 1923, a state gasoline tax of 2 cents per gallon was introduced, helping to fund the State Highway Commission.

Now, many citizens feel, Indiana must eliminate government positions to continue building infrastructure to attract investment.

“Remove the (taxing) authority of any office or entity who historically has little or no oversight or transparency,” said Indianapolis resident Melyssa Donaghy. “Townships, libraries, airports, etcetera, spend an awful lot of money that is approved with little or no oversight or even public notice.”