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A Tale of Two Recessions

Thursday, November 19th, 2020

It was the worst of times. It was the even worse worst of times. It was the Great Recession of 2007-2009. It was the COVID Recession of 2020. How do the two recessions compare? The Great Recession began after the economy peaked in December 2007, and then continued for 18 months through June 2009. It…

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COVID Recession Makes Farmland Tax Predictions Harder

Thursday, October 22nd, 2020

Predictions are hard, especially about the future. Yogi Berra said that. (Unless he didn’t. Yogi also said, “I never said most of the things I said,” so we really don’t know.) Though some predictions are harder than others, we are confident about this one: Property tax bills for farmland owners will go down next year….

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Don’t get spun: What’s happening in our economy, right now?

Wednesday, September 16th, 2020

Forecasts? Don’t talk about forecasts. You kidding me?  I just want to know what’s happening now! With apologies to Jim Mora, that’s our problem. What’s happening in our economy, right now? In the first week of March, we’d have answered that gross domestic product above inflation grew 2.4 percent at an annual rate in the…

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Rents, Telecommuting and Harry Potter

Thursday, August 20th, 2020

Rents are falling in San Francisco. Keep that in mind as this column wanders along. The wizards in Harry Potter’s Britain use many forms of transportation. Brooms, but also floo powder, portkeys, flying vehicles, the Night Bus. Perhaps the most frequently used form of transportation, and certainly the most convenient, is disapparating and apparating. Disappear…

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Trouble for Indiana’s State Budget

Thursday, July 23rd, 2020

We got trouble, my friends, with a capital T. The Indiana state budget closeout for fiscal 2020 was held in mid-July, so we have a good idea of how bad things are. Revenues fell 8 percent below forecast for the year, 23 percent from March through June. We used $850 million in balances to cover…

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Recession and the Indiana Property Tax

Tuesday, June 23rd, 2020

Indiana school districts were relieved when the governor announced that the state would not be cutting aid in the coming fiscal year. With the COVID recession, state sales tax revenues were 15 percent below forecast in both April and May, and income tax revenues were down more. State agencies and universities had been told to…

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Our Economic Recovery Depends on Consumers

Tuesday, May 19th, 2020

Enough already. The economy is bad. This is the sharpest, deepest recession in 80 years. We get that. Let’s talk about something else. Like, how does the economy recover? Unfortunately, to answer that question we need to know what kind of recession we’ve got. So let’s look at some measurements that tell us what’s been…

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Indiana’s State Budget in the Corona-Recession

Monday, April 20th, 2020

How will Indiana’s state budget do in the corona-recession? We don’t know how deep the recession will be, or how long it will last, so there’s not much point to predictions. But we can ask what sort of recession the budget can handle, and what sort would cause trouble. Here are three questions. One, can…

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Supply and Demand and the Coronavirus

Monday, March 16th, 2020

The coronavirus is a world tragedy. Millions will get sick and too many will die. All of us will worry about family and friends. All of us will miss important events in our lives. The economy will suffer too. But how much? Let’s see if we can think it through using the economists’ tools –…

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The MLGQ is Long Overdue

Friday, February 21st, 2020

House Bill 1113 is 139 pages long. It covers lots of local government tax issues. It’s not controversial. It passed the House, with 95 members voting yes, and none voting no. The bill has moved on to the Senate. Perhaps the simplest change in this very long bill is this: It changes the name “assessed…

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Farmland Assessments: Is this the End of the Downward Trend?

Tuesday, January 21st, 2020

Just after the new year Indiana’s Department of Local Government Finance announced the new base rate for farmland assessment. It was $1,280 per acre. The base rate is the starting point for setting the taxable value of farmland for the property tax, to be used for tax bills next year. The number was down considerably,…

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Gross Domestic Product for Counties

Tuesday, December 17th, 2019

We just received the most wonderful gift from the U.S. Department of Commerce, Bureau of Economic Analysis. For the first time ever, the BEA has calculated Gross Domestic Product for counties. GDP is the value of goods and services produced each year, in current prices or adjusted for inflation. It’s the most complete measure of…

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How Tax Bills Are Calculated, and Where the Money Goes

Thursday, November 21st, 2019

The second installment for Indiana property tax bills was due a couple of weeks ago. If you own a house with a mortgage you probably didn’t notice. Let’s hope the bank remembered to pay!  But the rest of Indiana property owners had to send a check to the County Treasurer for the second half of…

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How Low are Indiana’s Taxes?

Thursday, October 24th, 2019

We’d like our taxes to be low. Sure, we value the schools, police and fire protection, roads and parks and libraries that our taxes support. But we all like a bargain. We’d like to have all those things at a low, low price.  How low are taxes in Indiana? The Census Bureau provides a great…

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Money for Schools

Tuesday, September 17th, 2019

Spending on K-12 education is by far the largest piece of Indiana government. Appropriations for schools make up half of the state’s general fund budget. School budgets are 55 percent of all local government budgets. Total local school appropriations are $11 billion in 2019. About $7 billion of this comes from state support, and $3…

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Is the Long Expansion Over?

Wednesday, August 21st, 2019

July 2019 marked the 121st month of the economic expansion that began after the Great Recession. That makes it the longest expansion in American history, surpassing the 10-year expansion of 1991-2001. But wait. The yield curve has inverted. Recreational vehicle sales are down. The “R-word,” recession, is trending on Twitter. Are we in recession already?…

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Why Does Indiana Keep Balances, and How Much is Enough?

Friday, July 26th, 2019

The Indiana State Budget Agency wrapped up the fiscal 2019 budget on July 11, with its annual closeout statement. There was good news. Revenues came in $267 million above forecast, and that meant that Indiana ended the year with more money in the bank than expected. State balances were almost $2.3 billion, which was 13.6…

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The Yield Curve Inverted. Is There a Recession in Our Near Future?

Tuesday, June 18th, 2019

It happened. The yield curve inverted. The big one. The 10-year Treasury bond rate dropped below the 3-month Treasury bill rate. That’s the inversion that economists think is the most reliable indicator of a coming recession. Yield curve inversions have happened before each of the last seven recessions. Over the past 50 years, every time…

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Paging Professor Phillips

Monday, May 20th, 2019

Inflation should be increasing.  But it’s not. Economist A.W. “Bill” Phillips was born in New Zealand but moved to Australia as a young man to continue his education.  He traveled to China, but had to flee the Japanese invasion in 1937, via the trans-Siberian railroad.  He arrived in England, but the war followed.  He joined…

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Revenue and Medicaid Forecasts Squeeze the State Budget

Wednesday, April 24th, 2019

Every two years the Indiana General Assembly writes a new state budget. This year the legislature set spending for fiscal year 2020, which starts in a couple of months on July 1, and for fiscal year 2021, which starts in mid-2020. Of course, to budget for the future legislators need a reasonable guess about how…

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