BY PATRICK GUINANE, Times of Northwest Indiana
pguinane@nwitimes.com
INDIANAPOLIS | A two-year phase-in of the property tax caps sought by Gov. Mitch Daniels drew no debate Tuesday on its way to clearing the Senate 47-1.
The Republican governor wants to limit tax bills to 1 percent of assessed value for homeowners, 2 percent for landlords and 3 percent for businesses. But his so-called circuit breaker provides relief by restricting the property tax revenue that flows to local government, with Lake County alone expected to lose $252 million next year.
"Any time we impose a circuit breaker, there's an effect on local government and there's an effect on schools," said Senate Tax Chairman Luke Kenley, R-Noblesville.
With that in mind, Kenley last week authored an amendment to Senate Bill 12 that gives local officials another year to take on the full brunt of the spending cuts, a move that would lower the initial Lake County budget cuts to $193 million. The first year-revenue losses projected for Porter County would plummet from $7.5 million to $142,630.
The legislation, which moves to the House, would set the caps at 1.5 percent next year for homeowners, 2.5 percent for rental property and 3 percent for commercial and industrial property. The caps for homeowners and landlords would revert to 1 percent and 2 percent, respectively, in 2010.
The Senate also voted 41-7 to send the House a separate measure that would begin the three-year process of writing the tax caps into the Indiana Constitution.
Democrats argue that, in some instances, the caps merely are looming local income tax hikes masquerading as homeowner relief. But even if locals raise county income taxes to plug budget holes brought by the caps, schools statewide still face $154 million in spending cuts.
"We hope to provide some relief from the General Assembly to help schools deal with this situation," Kenley told colleagues.
The Senate later voted 29-18 to send the House a watered-down version of the governor's plan to eliminate elected tax assessors.
The legislation, Senate Bill 16, would allow the 92 county assessors to keep their jobs, along with 44 local assessors in townships that handle more than 15,000 parcels.
In Lake County, local assessors would keep their jobs in Center, Calumet, Hobart, North, Ross and St. John townships, but not in Cedar Creek, Eagle Creek, Hanover, West Creek and Winfield townships. Among Porter County's 12 townships, only Portage and Center would retain local assessors.
Opponents complained that the consolidation effort would result in negligible cost savings and make it more difficult for property owners to contest inaccurate assessments. Supporters say the move would bring the increased accountability and uniformity in assessment practices.