GARY | Indiana’s unique fiscal policies — particularly the property tax cap backed by the General Assembly and enrolled in the state’s Constitution by voters in November 2010 — now pit local communities against one another in a perpetual fight for funding.

And the situation continues to worsen, especially for municipalities with high poverty rates and low property tax collections.

Justin M. Ross, assistant professor of public finance at Indiana University Bloomington’s School of Public and Environmental Affairs, painted that dismal picture at the Chancellor’s Commission for Community Engagement spring gathering at Indiana University Northwest.

The semi-annual event promotes substantive exchange by connecting campus and regional community leaders, said host IUN Chancellor William Lowe.

Better known as circuit breakers, the original property tax caps limited the amount of property tax owed based on a percentage and type of property being taxed, said Ross, who studies public policy and finances.

Since that law went into effect, the General Assembly has added additional tax breaks to attract businesses to the Hoosier State, he said. Those include tax abatements for companies that expand their businesses or move to Indiana from other states.

That blending of state fiscal policies has had a crippling effect on local governments, stuck with a smaller pot of money to provide services, Ross told community and political leaders gathered at the John W. Anderson Library complex.

Ross believes neither the General Assembly nor citizens realized the effect those policies would have on local governments that now scramble to provide basic services.

Everything from the public schools to infrastructure repairs and emergency services is threatened, Ross said.

Lake County Commissioner Roosevelt Allen, D-Gary, said the state’s policies make doing business in Indiana attractive. However, he said, if the quality of life declines because local services aren’t provided, companies will choose to relocate elsewhere.

Ross stressed the need for collaboration and cooperation rather than infighting. He also proposed local policy reforms that would foster strategic collaboration among taxing bodies, promote fiscal transparency and budget planning and emphasizing tax policy neutrality.

These steps will take a great deal of effort and education from the policy-makers to citizens, Ross said.

“The story of local finances is being told by others,” he said, encouraging those at the event to make certain they let everyone know what’s going on, from the citizens to the statehouse.

“We can’t live on our own islands.”