FOR IMMEDIATE RELEASE
Hershman Supports Property Tax Reform Bill
Amended Plan Offers $600 Million in New Relief;
Puts Cuts, Caps, Spending Controls in Place
(STATEHOUSE) –State Sen. Brandt Hershman (R-Wheatfield) said homeowners in Senate District 7 could see more than a 25 percent decrease in their property tax bills under legislation passed today by the Senate Tax and Fiscal Policy committee.
Hershman, who serves on the committee, said homeowners in Howard and Jasper counties, where local governments have implemented a local option income tax, could see up to a 50 percent decrease in their residential property tax bills.
Senators passed an amended version of Gov. Mitch Daniels’ property tax reform package. By a bi-partisan vote of 9-0, the Senate committee sends to the floor a bill that offers $600 million in new relief and puts cuts, caps and government spending controls in place.
Hershman said he is encouraged by the work of the committee which closely mirrored recommendations of an in-depth four-month study by Indiana’s Commission on State Tax and Financing Policy in which Hershman was also a member of. The commission was comprised of Democratic and Republican legislators from the Senate and House of Representatives, as well as citizen advisors.
“Lawmakers from both sides of the aisle have looked at this issue for four years and I believe with House Hill 1001 there is a balance of providing a balance of essential services and permanent property tax relief for Hoosiers,” Hershman said. “Homeowners, businesses and farmers have called upon us fix our antiquated property tax system and I am confident this is major step toward that goal.”
The Senate version of HB 1001 includes:
Immediate Relief: The Senate’s version of HB 1001 provides an additional $600 million in relief for property taxes due in 2008 above and beyond what has already been appropriated by the state. Indiana’s current budget already includes a record $2.1 billion in property tax replacement and another $550 million is appropriated over two years to help offset property tax increases.
Supplemental Homeowner Deductions: Provides for a homeowner deduction of lesser of $45,000 or one-half of assessed value. Provides supplemental deduction equal to 35 percent of next $600,000 of AV and 25 percent on remaining AV over $600,000.
Permanent Property Tax Caps: Phases in by 2010 a 1 percent property tax cap on owner-occupied homes; a 2 percent cap on other residential properties and agricultural land; and 3 percent on businesses. A companion bill, Senate Joint Resolution 1, would make the 1 percent cap on homes permanent by adding it to the Indiana Constitution. Historically, previous property tax reductions through shifts to other taxes have proven to be temporary.
Property Tax Cuts: Implementation of caps (also known as circuit breakers) results in $342 million in property tax cuts in 2009 and $619 million in 2010.
Decreased Reliance on Property Taxes: Overall, the state pays $1 billion of local costs from state revenues other than property taxes resulting in $1 billion in additional property tax relief (remaining school general fund; child welfare, juvenile incarceration, K-12 pension debt, pre-school special education, and remaining 50 percent of pre-1977 local police and fire pensions).
Citizen Controls on Government Spending: Requires voter approval by public referendum for all government construction projects over $7 million or 0.5 percent of the local assessed valuation of area properties. Closes 18 loopholes and exceptions local units and schools may currently use to increase property taxes. County councils must review all budget and levy increases for taxing units within each county. Schools will adhere to stricter guidelines for planning and construction. Reforms and restricts the authority counties and cities have to remove areas from the tax base for economic development uses.
Uniform Assessment System: Combines duties of township assessors at the county level except for townships with 15,000 parcels or more in an effort to make property assessments more uniform and fair. Requires the county assessor to interview township assessors for employment. Allows satellite offices for convenience to taxpayers.
“Making the appropriate spending cuts and caps now can give relief to homeowners and families who have looked to us for help,” Hershman said. “The Hoosier taxpayer deserves a balanced system and permanent property tax relief.”
-30-
Senator Hershman represents District 7, which includes Carroll, Clinton, Howard, Jasper, Tippecanoe and White counties.
Audio Clip
|
