By Bryan Corbin, Evansville Courier & Press
INDIANAPOLIS - After months of hearing homeowner complaints about spiraling property taxes, state lawmakers want to get a running start today on passing property-tax reform.
Today is the Legislature's annual organization day, normally a one-day ceremonial occasion before the legislative session starts in earnest seven weeks later, in January. This time, however, state lawmakers plan to get real work accomplished on organization day, with key committees holding hearings through December, in hopes of voting on property-tax reform after the full Legislature reconvenes Jan. 8.
Lawmakers have promised swift action to satisfy angry homeowners because the Legislature's 2008 short session by law must end in mid-March.
Gov. Mitch Daniels' proposal to raise the state sales tax by 1 percentage point to 7 percent, cap residential property taxes at 1 percent of assessed value and require public referendums on local bond issues will take center stage today.
In the Indiana House of Representatives, where Democrats hold a slim 51-49 majority over Republicans, a prominent Democrat, Rep. William Crawford of Indidanapolis, today plans to introduce Daniels' legislation officially as one large bill, House Bill 1001.
Crawford, chairman of the tax-writing House Ways and Means Committee, plans to hold two public hearings on the bill, including one on Dec. 10 at the University of Southern Indiana in Evansville.
Bills involving revenue must originate in the House.
But much of Daniels' complicated proposal also will be introduced in the Senate, where it has been split into 11 bills and three proposed constitutional amendments.
Under the Senate version of Daniels' legislation, the state constitution would have to be amended in order to:
permanently cap property taxes at one percent of assessed value for residential homes, at two percent for rental property and at three percent for business property;
permanently eliminate property taxes on church-owned property;
prohibit the use of property taxes to pay for school operating funds.
To be enacted, constitutional amendments would have to pass the Legislature twice, in 2008 and again in 2009, and then go before the voters as a referendum in 2010.
Republicans rule the state Senate with 33 seats to 17 for Democrats.
Senate President David Long, R-Fort Wayne, said that the parts of the Daniels plan that do not require amending the constitution have been split into 11 bills, which will be heard by various committees in December. Among those most closely watched:
Senate Bill 16 would eliminate the 1,008 township-level assessors statewide and assign their duties to the 92 county assessors. The bill does not yet specify whether the county assessors would be elected, as is now the case, or appointed, as Daniels has proposed, Long said. Township trustees would not be affected.
Senate Bill 13 would attempt to rein in exorbitant architectural fees for new school construction by making available a standardized set of school building plans that local school boards could consider adopting. The choice whether or not to utilize the standard building blueprints would be up to each school board; it would not be a mandate, Long said. But he predicted the concept would save school districts and taxpayers a significant amount of money, if passed.
Senate Bill 12 would cap property taxes on an interim basis, until a state constitutional amendment could be ratified three years from now to make the so-called property-tax "circuit breaker" permanent.
Action today
The bills and constitutional amendments will be formally introduced and assigned to committees today. Given their complexity and the financial stakes involved, the Daniels plan - as well as related, competing proposals - will be heavily debated by lawmakers during the 10-week session that ends March 14. "We must find a solution, and if we don't, it's our fault," Long said.
A House Democrat, Rep. Dale Grubb, agreed that anything that passes will be a hybrid, compromise version. "I think the best piece of legislation we can come up with for Hoosiers in general is something that no one, none of the interest-holders, will love, but everyone can live with," Grubb, of Covington, Ind., said.
Meanwhile, lawmakers plan to pass one non-controversial bill today. Over the summer, Daniels had extended a deadline to file for homestead deductions and credits for property taxes payable next year from June 10 to Oct. 15. He also extended an Aug. 1 deadline for counties to adopt new local income taxes to offset a portion of property taxes to Oct. 1, then pushed the date back to Dec. 31.
Those deadlines were set in law; but legislative leaders have said the Indiana House and Senate would muster the two-thirds votes necessary to suspend rules and ratify the orders retroactively by passing the bill today. It usually takes at least three days to pass a bill.
The Associated Press contributed to this story.