By JENNIFER WHITSON Courier & Press Indianapolis bureau (317) 631-7405 or whitsonj@courierpress.com
February 8, 2006

INDIANAPOLIS - The fate of a bill that would give homeowners a tax credit against this year's property tax bills, transfer some property assessment duties to the county level and eliminate property taxes all together in 2009 seems uncertain in the Senate.

On Tuesday, the Senate Tax and Fiscal Policy Committee heard more than four hours of testimony on House Bill 1001. The bill as passed by the House would:

  • Give homeowners a one-time credit against child welfare levies in their 2006 bill that has a net impact of about a 7 percent reduction in those levies. The cost to the state is $147 million.

  • For less populous townships that have a combined office of trustee assessor, take away the office's assessing duties and give them to the county. The township official would still be a trustee and run poor relief.

  • Automatically require a referendum vote on any construction project that exceeds the lesser of two thresholds: 2 percent of a taxing unit's assessed value or $50 million.

  • Transfer all growth in costs in the child welfare levy from the property tax rolls to the state budget starting in 2007.

    While senators listened to testimony, Gov. Mitch Daniels and Indianapolis Mayor Bart Peterson, president of the Indiana Association of Cities and Towns, held a news conference asking lawmakers to give local government units the authority to raise other types of taxes, such as local sales, income, hotel or food and beverage taxes, to replace property taxes.

    "Some things should be beyond partisanship," Daniels said. "We can't shift away from property taxation unless we have something to shift to."

    Sen. Luke Kenley, R-Noblesville, sponsored a measure in 2005 that would have allowed local government units to raise local income taxes, but the provision died in the House.

    Kenley said he wasn't going to take up the topic again unless he could get some assurances that the House would also support it. "The political reality of an election year is going to make it difficult," Kenley said.

    Daniels said he was willing to try to convince members of his own party that local authority to raise different types of taxes is important.

    "I'm going to continue to urge people in my party who have hesitated about this to act and act now and act boldly," Daniels said.

    Asked if House Bill 1001 will be changed to carry other Senate ideas or just be killed, Kenley said he didn't know yet.

    "I don't know what we can do with it," Kenley said, calling the changes in the bill "inch by inch reforms" if they don't include local taxing flexibility.

    Kenley said he wanted to talk to committee members and then take up House Bill 1001 again in two weeks.

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