By Bryan Corbin, Evansville Courier & Press
INDIANAPOLIS - The Indiana House has turned back a Republican attempt to restore the original version of Gov. Mitch Daniels' property-tax circuit breakers in the state constitution.
The House this afternoon voted 50-49 against a proposal that would reinstate the original wording that a House committee removed last week.
As passed last month by the state Senate, SJR 1 would have amended the state constitution to declare that a homeowner's property taxes could not exceed 1 percent of a home's assessed value, something Daniels has advocated.
But last week, the House Ways and Means Committee chairman, Democrat William Crawford, changed the wording of SJR 1 to say that property taxes would be capped at 1 percent of household income, not 1 percent of assessed value. House Republicans blasted Crawford's change, saying it had not been studied and its property-tax impact was unknown.
House Democrats defended it, saying the change would protect senior citizens and homeowners on fixed incomes.
The proposed constitutional amendment, SJR 1, came before the full Indiana House today.
State Rep. Randy Borror, R-Fort Wayne, tried to amend the amendment further - basically, to take out Crawford's wording and reinstate the original version the state Senate passed. House members debated that today.
In both versions, the property-tax caps or "circuit breakers" would 2 percent of assessed value for rental properties and 3 percent of assessed value for business properties. The difference between Crawford's and Borror's version is whether the residential cap of 1 percent would be tied to household income or to assessed value.
"This is the decision point, this is the moment of truth for whether you support a 1 percent-of-assessed-value cap for homeowners or not," House Republican minority leader Brian Bosma urged his colleagues.
State Rep. Russ Stilwell, who is the Democratic majority leader, opposed Borror's change. Stilwell, D-Boonville, noted that keeping SJR 1 as Crawford had worded it would keep the issue alive for conference-committee negotiations with the state Senate next week.
By a slim margin, the House defeated Borror's proposal, meaning SJR 1 is eligible for a third-reading vote in the House.
If the Democratic-controlled House and Republican-controlled Senate can reach agreement on wording of SJR 1 this session, then the proposed constitutional amendment would need to be approved a second time by the next Legislature in 2009 or 2010 - and only then could it go before the voters in a referendum for ratification.
Separate from the constitutional-amendment debate, the Indiana House has previously voted to change state statute to create a residential circuit breaker of 1 percent of assessed value. That bill, House Bill 1001, is the omnibus bill containing most of Daniels' property-tax relief plan; and it is currently before the state Senate.
If both House Bill 1001 and SJR 1 were passed in their present forms, then there would be an inconsistency between the new state law, which would take effect this year, and the new constitutional amendment, which could not be ratified before 2010 at the earliest.
Daniels has signaled his opposition to tying the residential property-tax cap to household income, saying the 1-percent circuit breaker should remain tied to assessed valuation.