Local News
House passes property tax caps
Local governments facing fewer dollars
It appears likely that Indiana voters in November will be asked to amend the state constitution to make property tax caps permanent.
The Indiana General Assembly has already made property tax caps a state law, but Monday’s passage of a House resolution removed what many considered the final roadblock in the way of a November referendum.
Under the proposed amendment to the Indiana Constitution, residential property will be capped at 1 percent of assessed valuation, farm ground and rental property at 2 percent, and businesses at 3 percent.
The Indiana House Monday passed a resolution to place the question on the 2010 general election ballot by a 75-23 vote. Voting in favor of the passage were Rep. Ron Herrell, D-Kokomo; Rep. Jacque Clements, R-Frankfort; Rep. Eric Turner, R-Gas City; and Rep. Bill Friend, R-Macy.
The Indiana Senate, which passed a similar resolution in 2009, is expected to consider the measure within the next few days.
“It absolutely will pass the Senate,” Howard County Councilman Paul Wyman said.
Wyman said the caps are already state law and the county has been working to reduce spending in anticipation of fewer property tax dollars in the future.
“We’re going to get less money this year and in 2010,” he said. “The pressure is not raising taxes but to make the appropriate cuts. Government has to find ways to reduce spending instead of raising taxes.”
Wyman was the lone no vote when the Howard County Council last September passed the 2010 budget, which included no spending cuts and instead transferred money from other accounts to fund county government operations.
“I’m not surprised. I’m glad it passed,” he said. “After the last property tax crisis, I believe Hoosiers will take advantage of the opportunity and make the tax caps permanent.”
Last January, Herrell took heat from Wyman at the Kokomo/Howard County Chamber of Commerce-sponsored legislative forum when Herrell refused to commit to passing state property tax cap legislation in the 2009 legislative session.
At the time, Republicans in both the House and Senate wanted the caps legislation passed immediately.
Herrell wouldn’t vote against his caucus to force a vote then, saying some legislators “want to wait and see what happens” with anticipated revenue projections in April before committing.
During the forum, Sen. Jim Buck, R-Kokomo, blamed House Speaker Pat Bauer, D-South Bend, for delaying an immediate vote on the legislation.
“I think [Herrell’s] caucus wants to vote for it, but his Speaker doesn’t,” Buck said.
Prior to the 2010 legislative session, the Indiana Association of Cities and Towns, the main lobbying group representing Indiana’s cities and mayors, was still urging a wait-and-see approach to the tax caps.
Kokomo Mayor Greg Goodnight, chairman of IACT’s legislative affairs committee, said in October that there “is no movement [at IACT] to take away the caps.”
At the same time, Goodnight said, “Maybe it shouldn’t be 1 percent for homeowners. Maybe it should be 3 1/2 percent for industrial. Right now, the caps are the law, but I don’t know you have to have every law in the constitution.”
Monday, Goodnight had little to say on the House passage of the caps legislation.
“I don’t think it’s a huge shock. Most people I know down at the Legislature knew they were going to do this,” Goodnight said. “[The Legislature] hasn’t seen what the effects are going to be.”
Howard County Council president Dick Miller was another advocate for caution.
But Miller said he’s fairly sure, now that the House has passed the bill, that it will win approval from Hoosier voters in a November referendum.
“It is going to be problematic for local government,” Miller said Monday. “And I think maybe the larger issue, and what some people are going to challenge, is the fairness of it.
“Is it absolutely imperative to rush to lock it down, when over time we could absolutely see the proof of what it will do? I’ve always been a believer that if something’s a good idea, then we can easily see the effect and it could then become a great idea with proof behind it. The proof will be put behind it in due time, so to me that’s why it’s puzzling there’s been a rush put on it,” Miller said.
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