EDITORIAL: More study needed on property tax caps

Elkhart Truth

Sunday, December 6, 2009 5:30 AM

Truth

The Indiana House and Senate will hold hearings this week on making property tax caps permanent by placing them in the state's Constitution.

The Senate's Tax and Fiscal Policy Committee met last week on the issue and will pick it up again Tuesday. The House Ways and Means Committee has scheduled a Monday hearing.

Not much has changed since the Democrats defeated a similar resolution during the last session. Not enough time has gone by to determine the real effect of caps on local governments, businesses and homeowners.

Local governments and schools are already struggling financially because of caps, which are scheduled to take full effect in 2010. Less revenue is coming in, forcing drastic cutbacks and affecting basic services.

Homeowners are not seeing positive effects on their property taxes because assessments have not been capped as well.

Average property taxpayers in Elkhart County saw their bills increase by about 1.1 percent this year. Altogether, a third of the counties in Indiana saw their average tax bills increase. So much for tax relief promised by the caps.

Elkhart County politicians are pleading with our local Statehouse delegation to delay caps. The circuit breaker will be 1 percent for residential properties, 2 percent for rentals and agricultural land and 3 percent for commercial and industrial properties next year. The caps are 1.5, 2.5 and 3.5 percent, respectively, this year.

A delay is not going to happen.

It's probably unlikely, given the Democratic majority in the House, that a constitutional amendment would pass either. Republicans generally support an amendment. Democrats have wisely suggested that more time is needed.

The governor and the Legislature shouldn't be strapped if someone comes up with an innovative idea in the future. The Constitution should not be easily altered.

Given the state of local government finances and the fact that property taxes have not actually decreased here, it's apparent that more time and study are exactly what's needed.