(STATEHOUSE) Oct. 24, 2007 – House Republican leaders announced support for Governor Mitch Daniels’ proposal to substantively cut property taxes, while overhauling the entire property tax system.  Republican leader Brian C. Bosma (R-Indianapolis) was encouraged by the bold, far-reaching steps of Daniels’ plan that will drastically cut Hoosier property taxes.  He encouraged Speaker Bauer to begin hearings on the plan as soon as possible after the legislature reconvenes in November.

“The Governor’s ‘Cut Now, Cap Forever’ tax plan is a home run for homeowners.  It sets forth an excellent framework for permanent property tax relief for Hoosiers,” said Rep. Bosma.  “House Republicans have been calling for substantial, permanent tax cuts and the Governor has presented a proposal that meets those criteria.  There will be many details to work out during the coming months as we gather more input from taxpayers, but this plan provides us with an excellent starting point.  House Republicans will introduce the package on Organization Day.  We encourage Speaker Bauer to hold hearings immediately after the plan is introduced so we can act quickly to provide relief to homeowners.”

 Under the proposal, homeowners’ property taxes would be capped at one percent of the assessed value, rental properties at two percent, and businesses at three percent.  Homeowners, on average, would see a 35-40 percent reduction in their property taxes.  The plan seeks a constitutional amendment to ensure the caps are permanent. 

In 2008, there would be $700 million in new homeowner property tax relief, slashing bills by more than one-third on average.  Beginning in 2009, the state would assume costs for child welfare, all school operating costs, and all school transportation costs.  Under the plan, Indiana homeowners would have the 9th lowest property tax burden in the country.

“The Governor’s plan professionalizes the assessment system, doing away with political elections and ends the current broken system,” said Rep. Jeff Espich (R-Uniondale).  “The proposal empowers citizens with a vote on construction projects and forces lower spending by locals, further reducing property tax growth.” 

The new, permanent property tax relief would be funded by a one-cent state sales tax increase.