Mike Braun's property tax cut lost the plot

Indianapolis Star

22-04-2025

As a surprisingly semi-regular contributor to IndyStar Opinion, I feel compelled to offer some thoughts about this legislative session's marquee debate over property taxes. It's a little tricky, though, because of how we deeply misunderstand the nature of time.
We judge our personal lives by minutes and days, when we'd be better off thinking in weeks and months. We assess career success in weeks and months, when we should probably be thinking in years. When it comes to public policy, we try to evaluate immediately, even though the real-world impacts often take decades to fully reveal themselves.
So, while I do have thoughts and opinions on this Indiana General Assembly session, I find myself in more of a reflective mood. Rather than diving deep into the policy weeds, I want to ask a bigger question that underlies the entire debate, and has shaped Indiana politics for the last two decades: What is the goal of state government?
But first, a DOGE detour
For my money, one of the most fair and clear-eyed observers of the Elon Musk-led Department of Government Efficiency DOGE experiment is Santi Ruiz. Ruiz, a right/libertarian-leaning commentator, was initially hopeful about the idea of a Musk/Vivek Ramaswamy-led federal efficiency commission. His March '50 Thoughts on DOGE' Substack post remains the most balanced and insightful thing I've read on the topic.
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The short version: Ruiz sees flashes of good, but ultimately argues that the chaos of the execution has undermined the project's stated purpose. On the Ezra Klein Show, Ruiz diagnosed a core flaw in the effort: Goodhart's Law, which is the idea that 'when a measure becomes a target, it ceases to be a good measure.' In other words, once you fixate on the number, you lose sight of the reality it's supposed to represent.
In DOGE's case, Ruiz argues, cutting government headcount and contracts, rather than improving government efficiency, became the metric of success. Instead of making the federal government more efficient, DOGE may be making things worse, because it has lost sight of the goal.
Goodhart's Law in action in Indiana
In my view, this is precisely what happened with property tax reform in Indiana.
Cutting property taxes was Gov. Mike Braun's top priority going into session, and from the start, there were clear divisions between him and legislative fiscal leaders. Local governments, for their part, warned that the proposed cuts would gut key services.
You know what happened: Everyone dug in. The result was a compromise that made nobody happy: cuts too modest for the hardliners, yet deep enough to jeopardize local services. And to plug the hole, local governments were given the option to raise income taxes.
The complexity of this issue was apparent from the outset, and it should have been clear to any observer that doing nothing, or something like punting this to a summer study committee, would have been far better in the long run.
But ultimately, the measure (the highest possible dollar amount of property tax cuts, this session) became the goal, and our leaders ended up passing something that no one is happy with. When the measure becomes the mission, we tend to make decisions that don't hold up over time.
'Smaller' government is a measure, not a goal
All of which brings us back to the bigger question: What is the goal of state (and local) government?
The core argument of the property tax cut hardliners is one that much of Indiana's political class seems to share, or at least publicly proclaim: that the goal of government is simply to be as small as possible.
I saw this up close during the 2023 mental health funding debate. We had broad, bipartisan support for investing in our state's mental health system. During session, a legislative leader pulled me aside. He reiterated his support, but said he needed help avoiding the perception that this was just another 'big government' solution.
Never mind that, since the days of English common law, caring for people with mental illness has been a core function of government. Never mind that failure to invest in mental health just shifts the cost to other government-funded systems like jails and emergency rooms. Never mind that, without government, there is no one else to pick up the slack. This legislator understood all this, but he was feeling pressure, not about whether the policy was right, but about whether it looked like too much government.
Hicks: Braun cut taxes for businesses, but most Hoosiers will pay more
We figured out a path forward, but the conversation stuck with me. Why is government such a loaded word? Why is it an insult instead of a neutral tool we can choose to use (or not use) depending on the problem? Why is the size of government any kind of goal at all, especially at the state and local level, which tend to be much more responsive to constituent needs and feedback than the federal behemoth?
At the end of the day, government size and spending is a measure, and an important one, but it is not the goal. Instead, the goal should be whatever contributes to the best conditions for thriving families and communities.
Sometimes that means getting the government out of the way, like removing regulatory barriers to innovation. Sometimes it means making government work better, like Mitch Daniels' legendary BMV turnaround.
And, yes, sometimes it means investing more in the kinds of services and infrastructure that improve lives and expand opportunity.
The irony is that almost every serious legislator and government official in Indiana knows this, but they are often paralyzed by the outsized influence of a small but loud chorus of folks who treat any additional investment as a betrayal.
Ultimately, though, if we want better outcomes from our government, our leaders need space to act on what most of them already understand: that good governance (at any size) is about advancing the common good.
Favorable Thriving Conditions.