((Statehouse) Wednesday, March 28 – State Representative Jeff Espich (R-Uniondale), Ranking Minority Member of the House Ways and Means Committee, today announced a Local Government Finance Reform Plan that will provide immediate property tax relief to taxpayers on their 2007 property tax bills and will remove the burden of school construction costs from property taxes. 

This year, property taxes for Hoosier homeowners are projected to rise by about 15 percent, on average, across the state.  Rep. Espich’s supplemental Homestead Credit would offset approximately 8 percent of this projected property tax increase.  House Bill 1001, the Democrat Budget Plan which passed along party lines, provided absolutely no property tax relief for homeowners in 2007.

“Hoosiers deserve action in the face of this impending property tax shock,” said Rep. Espich.  “The Democrat budget ignored property taxpayers.  There was no effort made to address this problem for taxpayers this year.  We can provide immediate relief, just as was done last year, while making a commitment to long term meaningful reform.”

School construction accounts for approximately 37 percent of property tax growth statewide.  Rep. Espich’s plan will end the property tax shocks caused by school construction projects by funding these projects with local income taxes and allowing taxpayers to seek voter approval of major construction projects.   

“For too long, communities throughout our state have seen skyrocketing property taxes because of the construction of school buildings,” said Rep. Espich.  “The property tax spreads this burden in a very inequitable way among taxpayers.  This plan will provide more fairness in paying for school construction.”

Rep. Espich is proposing the following initiatives as part of his plan.  More details are attached.

Local Government Finance Reform Plan

8% Additional State-funded Homeowner Property Tax Relief in Pay 2007 & Beyond   
          To provide immediate property tax relief

School Construction Income Tax
          To remove the single biggest source of property tax shocks

Incremental Local Option Income Tax (LOIT)
          To reduce dependence on property taxes to fund government services
         
Referendum for Approval of New School or Civil Unit Construction
          To allow more taxpayer input on major local government construction projects         

State Pays for All Future Growth in Child Services Costs
          To improve access to child services across the state

2% of AV Circuit Breaker Remains Intact
          To protect property taxpayers