BY PATRICK GUINANE, Times of Northwest Indiana
pguinane@nwitimes.com
INDIANAPOLIS | A Senate panel voted Tuesday to water down the governor's property tax caps for a year, but not before enduring name calling from a central Indiana tax activist.
Aaron Smith, a Boone County man who runs the Web site Watchdog Indiana, told members of the Senate Tax and Fiscal Policy Committee they could be "rewarded as a soaring eagle" if they left the caps untouched or "left behind as a decaying carcass" if they approved the plan to phase in the tax breaks.
Smith has testified on nearly every property tax measure lawmakers have heard this session, letting them know whether he thinks bills are "taxpayer friendly." On Tuesday, he accused the Senate panel of caving to "special interests," which drew an angry rebuttal from Sen. Frank Mrvan, D-Hammond.
"You don't even know how we're going to vote, and you're accusing us of being against it," Mrvan said.
Ultimately, the committee voted 10-0 to soften the tax caps, collectively known as the circuit breaker. The approved changes, which head to the full Senate, would:
-- Cap homeowner tax bills at 2 percent of assessed value this year, 1.5 percent next year and 1 percent in 2010. Gov. Mitch Daniels had wanted the 1 percent cap, which translates to a $1,000 bill on a $100,000 home, to start in 2009.
-- Limit rental property bills to 3 percent this year, 2.5 percent next year and 2 percent in 2010. Daniels' plan would give landlords a 2 percent cap starting next year but no protection this year.
-- Cap business tax bills at 3 percent beginning in 2010, instead of 2009 as Daniels suggests.
-- Exempt referendum-approved local construction projects from the tax caps. The governor wants new building projects, including jails, libraries and schools, to go before voters, but funding for referendum-approved projects still could be jeopardized by the tax caps.
Cities, schools, county government, townships and other local units in Lake County faces $252 million in budget losses next year if the governor's tax caps are approved. The phase-in plan advanced Thursday would cut those initial losses to $193 million.
Statewide, the hit to local government would drop from $599 million to $325 million. In Porter County, the estimated first-year losses would plummet from $7.4 million to $142,630
The circuit breaker works by lowering local budgets, so the breaks for taxpayers are equal to the revenue losses for local government.