INDIANAPOLIS | The property tax relief plan Gov. Mitch Daniels intends to unveil later this month will include a constitutional amendment aimed at curbing future tax growth.
The Republican governor revealed that tidbit Friday in a question-and-answer session with reporters. But he declined to discuss specifics of his plan, saying the details still are being worked out.
"I've said that what we do has to be fair, far-reaching and final. Final means that I will be looking for ways to make this last," Daniels said. "To me, that means parts of it, at least, need to be put in our constitution, where they can't be undone."
Daniels previously has said he supports some mechanism to restrict annual growth in local government spending, but he hasn't articulated exactly how that might be spelled out in a proposed amendment to the Indiana Constitution.
Lawmakers have batted around a plethora of relief options in recent months, including several plans that would shift some local responsibilities, such as school operating budgets and child welfare costs, to the state. Fringe groups have called for the complete elimination of property taxes, which would require major increases in state income or sale taxes.
"I think their heart's in the right place, but there's huge practical issues around it," Daniels said. "I want to go as far in that direction as we can, but I think it'd be irresponsible to promise a complete elimination, at least based on any plan that's been put forward so far."
Abolishing property taxes, the governor added, would leave local governments financially vulnerable during economic downtimes, as sales and income tax collections tend to wane during a recession. It also could make it expensive to borrow, as lenders tend to prefer the predictability of property taxes for debt financing.
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