FOR IMMEDIATE RELEASE
Kenley announces 3rd property tax hearing for Aug. 13
(STATEHOUSE) – Indiana’s Commission on State Tax and Financing Policy will look at how other states handle key tax issues during its third meeting of the summer, scheduled for 1 p.m. Monday, Aug. 13, in Room 404 of the Statehouse.
Sen. Luke Kenley (R-Noblesville), who chairs the commission, said the next meeting would feature data and discussion on what other states do concerning:
- petitions, remonstrances and referendums on government construction projects;
- circuit breaker provisions capping property taxes;
- tax increment financing districts (TIFS) to promote redevelopment of areas ; and
- criteria other states use to determine what properties are tax exempt.
The meetings are designed to hear testimony and seek ideas on reforming Indiana’s property tax system. Kenley has said he hopes these hearings lead to a bi-partisan plan that can be considered by the legislature as early as organization day in November.
For the second straight week, the commission had a seven-hour meeting. Focus of testimony was on the pros and cons concerning merits of rebate checks versus tax credits. Also discussed was the assessment process and how it could be improved.
Kenley emphasized that while the commission holds this series of meetings, county government has tools available to take immediate action on the property tax issue.
“The Indiana General Assembly passed legislation to decrease dependence on property taxes,” Kenley said. “We have tried to give your local elected officials opportunities they can take advantage of right now. So far, six counties have adopted local option income taxes as alternatives to property taxes and others are considering it. Those counties that have acted aggressively are helping themselves ease many of their property tax problems.”
The issue of rebate checks vs. tax credits included a new twist from the governor’s office. Ryan Kitchell, director for the Office of Management and Budget, read a statement from Gov. Mitch Daniels urging the commission to consider “targeted credits” instead of rebate checks.
“We want to try and get immediate relief to those most at risk of losing their homes,” he said.
Some legislators were skeptical of the proposal because it meant not everyone with a homestead exemption would benefit as originally intended. Kitchell said estimates show 72,000 of 180,000 homesteads in Marion County would get relief under this proposal.
The current state budget dedicated $300 million this year to the property tax rebates and another $250 million in property tax credits next year. That is in addition to $2.1 billion in property tax replacement funds the state will send local governments to operate. The $550 million in rebates and credits come from licensing fees for slot machines at Indiana’s two horse tracks. Because timing of the “racino” payments was unclear, lawmakers chose to send property tax rebate checks upon receipt of the fees.
David Bottorff, executive director for the Association of Indiana Counties, estimated the cost of processing and distributing a rebate check would be approximately $1.25 per household. He put the expense of processing a credit at about 75 cents per household. Commission members questioned if the 50-cent difference might be consumed by printing and postage costs involved with notifying taxpayers of the credit adjustment. One commission member suggested since both plans might cost about the same, perhaps it would be best to continue down the current rebate check plan path and not waste taxpayer money or add to confusion by reversing course.
The assessment process was another item put under a microscope by commission members during the hearing.
In testimony from Cheryl Musgrave, the new head of the Department of Local Government Finance, the commission learned that perhaps too much is being asked of local governments where assessing issues are concerned. She said in her ten years as Vanderburgh County assessor, she did not have the manpower to ensure the job was done as comprehensively as possible. She emphasized salaries weren’t always high enough to attract and retain people with abilities needed to accomplish complex assessing work.
Other testimony from experts indicated that improved supervision and better training are needed in many areas. In some places, the lack of supervision and training may have contributed to tax bills many deemed unfair.
The commission also heard comments from three county assessors who emphasized the need for a uniform software system across the state. Kenley agrees, but feels if multiple systems are continued to be used, they should be simplified and able to interface more easily.
Monroe County Assessor Judith A. Sharp said politics sometimes plays a role in property tax inefficiencies and inequities.
“Every four years, we lose 30 percent of our assessors,” she said, urging the commission to consider making assessors a professional position instead of a political office. “You lose a lot of knowledge because of politics.”
The commission is comprised of Republican and Democrat lawmakers from both the Indiana Senate and House of Representatives. The commission meets when the legislature is not in session.
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