By John Byrne, Post-Tribune staff writer
INDIANAPOLIS -- Statewide property tax caps would take full effect this year, a year earlier than originally planned, in a proposal Democratic House leaders said Monday would save taxpayers an additional $200 million on upcoming bills.
The proposal passed the House 85-11, although several Republicans who voted to accelerate the caps said it was a maneuver by Democrats to divert attention from the fact they will not allow a vote on enshrining the caps in the state constitution.
The amendment's sponsor, Rep. William Crawford of Indianapolis, insisted the amendment was an honest bid to leave more money in struggling Hoosiers' pockets. He also argued moving the caps up would give lawmakers an extra year to study the impact on government budgets before considering the constitutional vote.
"This is the most certain piece of legislation we've got," Crawford said.
Under the law the General Assembly passed in 2008, property taxes this year can be no more than 1.5 percent of the assessed value for residences, 2.5 percent for rental properties and 3.5 percent for businesses. Those percentages are to decrease to 1 percent, 2 percent and 3 percent, respectively, for taxes payable in 2010. Those percentages are to decrease to 1 percent, 2 percent and 3 percent, respectively, for taxes payable in 2010 and beyond.
For an Indiana homeowner with a property valued at $100,000, the highest possible property tax bill this year would decrease from $1,500 to $1,000 if the plan becomes law, though there are exceptions built into the 2008 legislation that increase the amounts Lake County property owners can be billed based on how much debt local governments have on the books.
House Minority Leader Brian Bosma, R-Indianapolis, voted for the amendment, but called it "a duck and cover" by Democrats trying to get some good publicity despite their opposition to the constitutional amendment.
"I'm for property tax relief. I'm for real property tax relief, not a press release," Bosma said.
And Rep. Jeff Espich, R-Uniondale, pointed out Crawford's amendment illustrates how easily the property tax cuts can be changed if they aren't protected in the constitution.
"If we're for property tax cuts, what are we waiting for?" Espich asked.
Local governments, particularly the city of Gary, are counting on the higher caps this year to postpone temporarily the deep budget cuts the 2008 legislation will force on them. Gary stands to lose $24 million in 2009 with the caps at 1.5 percent for homes. State fiscal analysts estimate the losses to the city could reach $30 million or more when the caps decrease to 1 percent for homesteads.
The bill faces another vote in the House. If it passes, the package likely will be subject to further negotiations in conference committee.