By Bryan Corbin, Evansville Courier & Press
INDIANAPOLIS - House Democrats today made a counterproposal to the offer Republicans laid on the table Thursday, upping the ante in the high-stakes game of property-tax relief in the Legislature's final days.
Democrats claim their revised version would offer a combined total of $1 billion of property-tax relief to homeowners while freezing property taxes for senior citizens.
House Ways and Means Chairman William Crawford unveiled the plan today during a meeting of a House-Senate conference committee hearing House Bill 1001. That's the massive omnibus bill that contains elements of Gov. Mitch Daniels property-tax relief plan as well as lawmakers' own ideas.
The Democratic-controlled House and Republican-controlled state Senate each have passed their own divergent versions of House Bill 1001, prompting intense conference-committee negotiations to hammer out a compromise before the March 14 adjournment deadline.
The Democrats' counteroffer still would cap property taxes on homesteads at 1 percent of assessed value. But it would not include a 2 percent cap for rental properties or a 3 percent cap on business properties, as the governor and Republican lawmakers want.
Property taxes would be frozen for senior-citizen homeowners older than age 65, whose incomes are no more than $35,000 individually (or $50,000 jointly), and whose homes are no more than $200,000 in assessed value, under the Democratic plan.
By counting $250 million in homestead credit already pledged, another $150 million credit on top of that, plus $600 million generated from raising the 6-percent sales tax to 7 percent, Democrats say they could provide $1 billion in property-tax relief.
The Republican offer would have the state taking over the costs of several levies, including school operating costs, child welfare, juvenile incarceration and police and fire pensions that are now covered by local property taxes. By contrast, the Democratic counteroffer does not have the state taking over those levies, although the state would assume the costs of any growth in four other levies relating to medical assistance for children with special needs or psychiatric treatment.
Thursday, Republicans from the House and Senate stood on a Statehouse stairway and offered their proposal to close the deal. Their plan would cap property taxes at the 1-, 2- and 3-percent levels, but phase them in over two years. They said it would provide $700 million in immediate relief and remove $1 billion from property-tax levies. Gov. Mitch Daniels said Thursday he would sign that version if it passed.
Democratic House Speaker Patrick Bauer was visibly miffed at the Republican media event, however, and today the Democrats responded with their counterproposal. Negotiations continue.
The legislation must past in identical form in both the Senate and House in order to go to the governor for his consideration.
The Associated Press contributed to this story.