Evansville Courier & Press staff and wire reports
INDIANAPOLIS - House and Senate Republicans stood united behind a modified property tax relief and restructuring proposal on Thursday that they portrayed as an olive branch to Democrats in the Legislature.
Republican Gov. Mitch Daniels said it included more than a dozen provisions sought by Democrats, was a "very far-reaching effort to bring the property tax debate to a final successful resolution," and that he would be willing to sign it.
Daniels urged House Democrats to agree to the proposal.
"If this isn't good enough for somebody, then they don't want to cap property taxes," Daniels said. "They are entitled to that point of view, but the people of Indiana deserve permanent protection, and it's time we gave it to them."
The governor said the plan met his criteria for providing immediate and lasting property tax relief, reform of the assessment process and local spending controls.
Rank-and-file Republican lawmakers lined up along a Statehouse stairway as their party's leaders from the House and Senate announced their joint plan to the media on Thursday.
House Speaker Patrick Bauer was visibly miffed at the way Republicans unveiled their plan at a news conference, and he said more negotiations were necessary.
"It's interesting that something called a 'compromise' was a compromise among one party. I wouldn't call it a compromise," Bauer, D-South Bend said. "That's not the proper way to negotiate."
Meanwhile, House Ways and Means Chairman William Crawford, D-Indianapolis, said later that House Democrats were willing to support constitutional caps on property tax bills for homeowners based on the 1 percent assessed values of homes.
Crawford has dropped his insistence that the proposed constitutional amendment, SJR 1, cap residential property taxes at 1 percent of household income. But Crawford said Democrats did not support constitutional caps on bills for rental and business property, which Daniels and his fellow Republicans also want.
Part of the plan, House Bill 1001, would cap homeowners' property tax bills at 1 percent of assessed value, with 2 percent limits on rental property and 3 percent caps on business property. Written into state statute, the caps would be phased in and, when fully implemented in 2010, would save taxpayers about $600 million.
But that is money schools and local governments would not get. Many educators and local officials say that would result in big budget cuts that could lead to teacher layoffs or cuts in vital services such as police and fire protection.
The plan would allow counties to raise local option income taxes. If they increased local income tax by at least 0.25 percent to offset property tax increases or cut property taxes outright, they could raise it by another 0.25 percent for new spending on public safety.