The Washington Times-Herald

CNHI Series

January 8, 2008

How Indiana government and tax system developed

• 1679: French explorer Robert Cavelier, Sieur de la Salle, crosses the St. Joseph-Kankakee River portage into Indiana, becoming the first European known to set foot in the state.

• 1754-1763: The French and Indian War. As a result, the territory encircling Indiana becomes an English possession.

• 1763: The English forbid American colonists from settling in the “new west,” including Indiana, contributing to the American rebellion.

• 1787: Congress enacts the Ordinance of 1787, establishing a territorial government of the Northwest Territory, including Ohio, Indiana, Illinois, Michigan, Wisconsin and part of Minnesota.

•1800: Congress separates Ohio from the Northwest Territory, designating the rest the Indiana Territory and appointing William Henry Harrison as territorial governor.

•1800: Population 2,632

•1805: Michigan is separated from the Indiana Territory.

•1809: The Illinois Territory is formed, reducing Indiana to its present size.

n 1810: 24,520

•1811: U.S. forces take control of the northern two-thirds of Indiana from Native Americans during the Battle of Tippecanoe near Lafayette.

•Dec. 1813: Corydon is established as the seat of Indiana government

•June 29, 1816: Indiana adopts its first constitution

•Dec. 11, 1816: Indiana is admitted into the union, becoming the 19th state.

•1820: Population 147,178

•1825: The state capital is moved from Corydon to Indianapolis

•1830: Population 343,031

•1837: The state goes bankrupt during the Panic of 1937.

•1840: Population 685,866

•1850: Population 988,416

•1851: A new constitution is adopted.

•1852: The state creates a tax-supported public school system.

•1860: Population 1.35 million

•1870: Population 1.68 million

•1880: Population 1.97 million

•1880-1900: The state creates new agencies, including examination and licensing boards, natural resource conservation agencies and social health and welfare agencies.

•1890: Population 2.19 million

•1900: Population 2.52 million

•1905: Indiana begins levying a statewide property tax to raise money for school funding.

•1909-1911: A new state constitution is drafted, but the Supreme Court invalidates the action and constitution of 1851 remains in place.

•1910: Population 2.7 million

•1910: The population of Indianapolis reaches 225,000

•1920: Population 2.93 million

•1923: The General Assembly enacts the state’s first gasoline tax, which helps fund the State Highway Commission and pay for construction of state highways.

•1930: Population 3.24 million

•1933: State government is reorganized with all state agencies grouped into departments while the power of the governor’s office is strengthened. The same year, the General Assembly passes the Indiana Gross Income Tax Act, which serves as the state’s principal source of tax income until 1963.

• 1940: Population 3.43 million

•1947: The Indiana Department of Revenue is created to consolidate the administration of the state’s major tax laws.

•1950: Population 3.93 million

•1960: Population 4.66 million

•1963: The state tax structure is drastically changed with two new taxes introduced to supplement the gross income tax: a 2 percent sales tax and an adjusted gross income tax of 2 percent.

•1970: Population 5.19 million

•1975: State lawmakers decree that the right to nominate candidates for governor, lieutenant governor and U.S. senator is now by direct primary.

•1980: Population 5.49 million

•1980-1985: In response to recession, the individual income tax and sales tax are increased.

•1988: Voters eliminate a constitutional amendment banning lotteries, leading to the creation of the Hoosier Lottery in 1989.

•1990: Population 5.56 million

•2000: Population 6.08 million

•2002: The General Assembly votes to repeal the inventory tax.

•2006: The General Assembly votes to move the state to a market-based system of assessment called “trending.” The system is based on sale prices of property and is conducted annually.

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CNHI Series
  • crossroads SERIES logo Indiana Property Tax Reform Looms — A 3-part series Controversy created by rising property taxes and delays in billing has brought Indiana to a crossroads of change. The state legislative session that begins today will tackle the issue of government structure and taxation policy, with some calling for radical reform and others urging caution.

    Government at a Crossroads is a three-part series examining the past, present and future of Indiana’s system of government and taxation. The series is a collaboration of Indiana newspapers owned by Newspaper Holdings Inc.

    January 8, 2008 1 Photo

  • State tax structure has grown in complexity 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.

    January 8, 2008

  • mitch daniels Quotables... Quotes from many of the players...

    January 8, 2008 1 Photo

  • How Indiana government and tax system developed It all started in 1905 when Indiana began levying a statewide property tax to raise money for school funding.

    January 8, 2008

  • Dilemma with property taxes is multi-faceted The dilemma facing Indiana’s property tax system is multi-faceted, but officials have differing views on what led to significant increases this year.

    January 8, 2008

  • Government at a Crossroads Legislature has big job in front of it Finding ways not only to reduce but also to reform property taxes, plus make changes in local government, is the primary challenge for legislators as the 115th Indiana General Assembly opens today.

    January 8, 2008 1 Photo

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