On deck today

The Senate Tax and Fiscal Policy Committee meets at 8 a.m. today to consider a phase-in of the property tax caps Gov. Mitch Daniels has proposed and new options for divvying up the roughly $80 million in property tax relief that would be raised by a 1 percent Lake County income tax. Meanwhile, the House is expected to consider dozens of amendments to the governor's overall tax relief plan, which is contained in House Bill 1008. Watch online at: www.in.gov/legislative.

On another taxing subject, Senate Tax Chairman Luke Kenley, R-Noblesville, said he thinks "it would be a mistake" for lawmakers to go along with state Rep. Charlie Brown's push to revisit 2003 tax breaks given to region steel mills and the BP Whiting Refinery. Brown, a Gary Democrat, has suggested big industry doesn't need the equipment depreciation tax breaks -- originally estimated at $35 million annually -- during strong economic times.

BY PATRICK GUINANE, Times of Northwest Indiana
pguinane@nwitimes.com

INDIANAPOLIS | Senate Tax Chairman Luke Kenley, R-Noblesville, plans to offer an amendment today that would phase in the governor's proposed caps on property tax bills, a move that would give local government another year to plot required spending cuts.

The Senate Tax and Fiscal Policy Committee also will consider four new options for splitting up the roughly $80 million in property tax relief Lake County could generate through a 1 percent local income tax. The Lake County Council failed to adopt the tax last month, but a 2007 law co-sponsored by Kenley freezes most local spending -- denying Lake County $17 million this year -- until the tax is in place.

"It's still a very critical element of having Lake County have a much more balanced tax system," Kenley said of the income tax Monday. "The other part of the equation is that Lake County really is going to need to dig in, in certain units, and determine how they're going to control the cost of local government."

Cities, schools, county government, townships and other local taxing units in Lake County stand to lose $252 million in revenue next year under the tax caps Gov. Mitch Daniels has proposed. Statewide, the projected losses total $599 million, but Kenley wants to cut that initial hit in half by easing into the so-called circuit breaker.

Instead of seeing their tax bills limited to 1 percent of assessed value next year, as Daniels has proposed, homeowners would receive a 1.5 percent cap in 2009. The lower 1 percent cap, which translates to a $1,000 tax bill on a $100,000 home, would start in 2010.

Property taxes on rental properties would be held to 3 percent of assessed value this year, 2.5 percent next year and 2 percent in 2010 under Kenley's plan. Daniels wants a 2 percent cap for landlords, starting next year, and Kenley said the governor was "noncommittal" when briefed on the proposed phase-in.

The Republican governor wants to begin giving businesses a 3 percent cap next year, while Kenley wants to move the start date for that cap to 2010.
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