The Senate-passed version of HB 1001 provides Marion County taxpayers with:

 

Immediate Relief:

Ø       2007

v      Allows Marion County to distribute the 2007 homestead rebate in a way that:

a)      Targets the bulk of the relief to those whose tax bills increased the most

b)      Ensures that the final 2007 tax bill will be no more than a 39% increase over the 2006 bill, providing greater relief to those who experienced the biggest increases

Ø       2008

v      Provides an additional $620M Homestead Credit, in addition to the $250M Homestead Credit passed during the last legislative session

v      Establishes a supplemental homestead deduction, which is applied after the standard $45,000 deduction.  Deduction is equal to 35% of the first $600,000 of assessed value and 25% of the remaining assessed value over $600,000

v      Caps homeowner property taxes at 2% of assessed value

v      Legislative Service Agency (LSA) estimates predict an average property tax reduction of 28.8% for Marion County homeowners in 2008(as compared to pre-rebate 2007 bills)

Ø       2009

v      Requires state to assume permanent takeover of 7 levies currently paid with property tax $

v      Provides a $100M Homestead Credit ($16.8M goes to Marion County)

v      Caps homeowner property taxes at 1.5% of assessed value

Ø       2010

v      Provides another $100M Homestead Credit ($16.8M goes to Marion County)

v      Caps homeowner property taxes at 1% of assessed value

v      LSA estimates predict that 2010 property tax bills in Marion County will be even lower than 2008 bills due to the “circuit breaker” caps and the permanent takeover of levies

 

Permanent Relief:

Ø       Provides permanent “circuit breaker” caps that limit the amount of taxes that can be paid on a home

Ø       Requires state to assume permanent takeover of the following property tax levies in Marion County:

v      School general fund ($327.7M in 2009)

v      Child welfare ($76.1M in 2009)

v      All state property tax levies ($1.0M in 2009)

v      State pays full cost of juvenile incarceration ($3.0M in 2009)

v      Pension bond debt payments for schools and pre-school special education ($17.2M in 2009)

v      Pre-1977 local police and fire pension payments ($20.8M in 2009)

Ø       As a result of the levy takeover, LSA estimates that—as compared to current law—Marion County will receive an increase in state-funded property tax relief of 51% in 2009 and 58% in 2010

§         Total $ amount of levy takeover in 2009 = $445.8M

§         New Homestead Credit in 2009 = $16.8M

§         Total state-funded property tax relief in 2009 = $462.6M

§         Total $ amount of state-funded property tax in 2009 under current law = $306.7M

§         Difference ($462.6M - $306.7M) = $155.9M in new state-funded property tax relief

Ø       Repeals 12 excess levy appeals and 4 maximum levy exceptions that allow local government units to raise additional property taxes

Ø       Allows taxpayers to have a say in local spending on capital projects by requiring a referendum on projects costing more than $7M

 

Other:

Ø       Relief funded by a 1% increase in the state sales tax

Ø       Phase-in of “circuit breakers” softens the blow of revenue losses to local governments and schools

Ø       Provides $100M state-wide to help cover “circuit breaker” losses to schools ($50M in 2009 and $50M in 2010)

Ø      Allows counties to seek replacement revenues by instituting local option income taxes