INDIANAPOLIS - A day after Gov. Mitch Daniels announced his plan to create "fair, far-reaching and final" property tax relief, state Senate Republican leaders endorsed his proposal and promised to accelerate it to an early vote in the Senate in January.
Leaders of the minority House Republicans also asked to fast-track the plan, but that will be up to the Democratic Speaker of the House Patrick Bauer.
State lawmakers on both sides generally have reacted warmly to Daniels' three-pronged plan, saying it includes elements they've supported in the past - although they emphasize the details must be studied.
State Sen. Lindel Hume, who recently offered his own constitutional amendment proposal for property tax relief, said he was pleased the governor is taking an active role dealing with the problem.
"It shows there's more than one way to skin the cat," said Hume, D-Princeton. "Now we're at the point of determining whose cat is to be skinned."
Daniels' plan is "very thought provoking," state Sen. Vaneta Becker, R-Evansville, said. "I think it is a very positive place to begin, and I appreciate (the governor's) leadership in coming forth with a plan that is very far-reaching."
Vincent Bertram, superintendent of the Evansville-Vanderburgh School Corp., favors the plan.
"I think the governor's proposal is to provide property tax relief and to provide other ways to provide funding for schools. This certainly would help achieve both," he said.
In a televised speech Tuesday, Daniels proposed a plan he said would lower homeowner bills by about one-third on average statewide. Some replacement revenue would come from raising the sales tax from 6 percent to 7 percent. The plan would:
Cap homeowner property taxes at 1 percent of a home's assessed value beginning in 2009, with limits of 2 percent for rental property and 3 percent for business property. Daniels wants lawmakers to set the limits by law, and then amend them into the Indiana Constitution so they are harder to undo.
Expand exemptions for homeowners, include new spending limits on local governments, create more centralized county oversight on spending, eliminate elected assessors and replace them with a single appointed assessor in each county and require that all significant local construction projects be voted on in a public referendum.
Have the state assume the remaining 15 percent of school operating costs it doesn't pay for such as school transportation costs and child welfare costs - all things now funded largely by local property taxes.
Provide about $3.1 billion overall in property tax relief.
One group not likely to be pleased with the governor's plan is township assessors. Citing inconsistent and inaccurate reassessments among some of the state's 92 counties and 1,008 townships, Daniels called for eliminating elected assessors at the township and county level.
"I don't know that we would lobby vigorously against it, but I think we would like to lobby vigorously for a plan that suits everyone that would fix it and get it right," Perry Township Assessor Glen Tornatta-Koob said.
She wondered if an appointed county assessor would be more partisan and less accountable to taxpayers than one who must face the voters every four years.
Tornatta-Koob, a Democrat, saw little need for the assessor proposal. She said that if a township assessor does not have a Level 2 assessing certification, then those assessing duties already would be taken over by the county assessor.
Another change in the Daniels' plan would limit spending by all local units of government - school construction, city, town, county, library - to no more than the rate of personal-income growth in the county, averaged over six years (typically, 2 percent to 5 percent). Budgets of all taxing units would have to be approved by the newly created Tax and Capital Control Boards in each county. Any spending above that would have to be approved by voters in a referendum.
The referendum process would replace the current remonstrance petition drive process for school construction bond issues.
"The one thing that will do is it will become more of a community-based decision where we have to get out and sell projects to the community," Bertram said. "In a referendum, it's important that school corporations have the tools at their disposal to market and sell a particular proposal to the community. That's also very empowering for communities."
The governor's proposal would mean that 100 percent instead of 85 percent of school operating funds would come through state sources, not local property taxes. Both Hume and Bertram said that should not make any difference in the local control that school boards and superintendents now have to operate and pass budgets.
State Senate President David Long said Senate Republicans will introduce 10 or more bills with parts of the governor's plan on the Legislature's organization day, Nov. 20.
The Associated Press contributed to this story.