Property tax circuit-breaker moves to full Senate, opponents in tow

INDIANAPOLIS | A Lake County-inspired property tax relief plan cleared an initial legislative hurdle Tuesday, but not without picking up some opponents.

Lobbyists for Indiana's 91 other counties and some 400 cities and towns fought against extending the so-called circuit breaker that Lake County implemented last year.

The program ensures homeowners don't pay more than 2 percent of their home's assessed value. The Legislature signed off on the circuit-breaker last year. Now, local lawmakers want to make it permanent and mandate it for the entire state.

"We're standing up to oppose this bill today, strictly for the fact that it's mandatory and it's not permissive, and it's not going to allow individual counties to make their own determination," said Ann Cottongim, lobbyist for the Indiana Association of Cities and Towns.

"It could require municipalities to reduce services or delay their payments. It's going to impact municipal budgets without any input from the municipalities."

Supporters says the circuit-breaker would aid homeowners in more than 50 counties, though most of the effected homes are in Lake, Marion or St. Joseph counties.

The Association of Indiana Counties and other opponents argue that making the program mandatory eventually could crush counties that don't have any way to replace the lost tax revenue.

The circuit-breaker effectively reduces a county's tax levy, rather than shifting costs onto commercial properties. Last year, Lake County had to use $9 million in casino money to offset the property taxes it lost because of the circuit breaker.

Supporters argue the program must be mandatory so that Lake County homeowners don't have to fear losing their homes every time the tax bill arrives.

"We don't want to have to do this every, every year," said George Rogge, president of the Miller Citizens Corp.

The legislation, Senate Bill 256, also would allow Lake County to apply the 2 percent circuit breaker to 2005 tax bills, which will be mailed later this year. County government failed to do that before last year's legislation expired.

Sens. Frank Mrvan, D-Hammond, and Sue Landske, R-Cedar Lake, are sponsoring the current measure, which now goes to the full Senate.

Rep. Ralph Ayres, R-Chesterton, is carrying an identical measure in the House.

It is part of an omnibus property tax relief package that House Republicans are pushing. Their plan also would consolidate assessment to the county level, eliminating the need for many township assessors.

Under the current plan, townships with more than 5,000 parcels would keep their assessors. Townships would not lose their control over schools and fire protection districts.