Evansville Courier & Press staff and wire services
INDIANAPOLIS - A panel of lawmakers and tax experts who have been exploring ways to reduce Indiana's reliance on property taxes might not produce a single, detailed plan for consideration in next year's Legislature.
Sen. Luke Kenley, chairman of the Commission on State Tax and Financing Policy, said Monday the bipartisan group might only be able to agree on some common concepts and goals on property tax relief and restructuring. Consolidating township-level assessors into the county level might be one such concept, he said.
"We're definitely looking at the idea of consolidating assessment responsibilities within the county," said Kenley, R-Noblesville. "I think that's a likely possibility out of this commission."
Kenley said a separate commission on local government reform, co-chaired by former Gov. Joe Kernan and Chief Justice Randall Shepard, is examining whether to keep township-level government. "But we're only probably going to touch the assessment side of the issue," Kenley said of the tax-financing commission that he chairs.
Gov. Mitch Daniels does plan to have a specific proposal of his own that he could present by the end of the month. "Actually I think his might be more focused than ours might be, because it's going to be tough to pull all the philosophies we have represented in the General Assembly in one report," said Kenley, who also chairs the powerful Senate Tax Committee. "We're going to do our best, but I don't now how detailed we'll be."
Kenley's comments came before his interim commission held the latest in a series of lengthy hearings on property taxes, which are expected to be the top issue in the legislative session that begins in earnest in January. That's in large part because a variety of factors has led to much higher bills for many homeowners this year.
Kenley said Daniels, a Republican, has a "bully pulpit" and needs to weigh in on the issue. But he said he did not know what kind of impact it would have on his commission's work. He said he did not plan for the commission to have a separate hearing on any proposal the governor produces.
"We haven't had hearings on the plans that the different legislators have put together," Kenley said. "I think in an effort to kind of achieve a bipartisan approach to this, we'll probably stay away from that."
Democrats control the House 51-49 while Republicans rule the Senate 33-17.
The political splits, and 2008 being an election year and a gubernatorial one at that, could make it even more difficult than usual for lawmakers to agree on ways of overhauling the property tax system.
Kenley said he expected lawmakers to introduce multiple bills on the issue.
Daniels last July had assigned the separate Kernan-Shepard commission to examine whether township-level elected assessors could be eliminated as a streamlining measure. In some rural townships, the offices of township assessor and township trustee are fused; in more populous areas, the township assessor and trustee are separately elected.
Meanwhile, the Kenley financing-policy commission spent part of its meeting Monday discussing debt incurred by local governments. It has been growing in recent years and this year, nearly 30 percent of all property tax levies are being used to pay for capital projects and pay back bonds. Many were issued years ago to pay for such things as government buildings and new schools.
Kenley said some taxpayers are concerned that debt service levies "never seem to go away."
Jim Merten with the bond underwriting firm of City Securities Corp. attributed increases in debt service in part to population growth in some parts of the state, and renovations to many high schools that were built in the 1960s and 1970s. He said the underwriting market likes bonds backed by property taxes because they are a more stable source of revenue than other taxes.