GOP Senators: Property Tax Reform Job #1
Republicans unveil reform package, including 3 constitutional amendments, cutting
homeowners’ property taxes, reducing local spending, improving assessments
(STATEHOUSE) – Proving they are committed to making property tax reform “job one” this legislative session, Republican state senators today introduced a series of bills—including three constitutional amendments—to “provide significant, permanent property tax relief, reduce growth in local government spending, plug unfair tax loopholes and reform Indiana’s broken assessment system.”
Traditionally, Organization Day each November is used for ceremonial purposes, explained Senate President Pro Tem David C. Long (R-Ft. Wayne). “These are uneasy times requiring urgent action on the part of state and local leaders. For many Hoosiers, a property tax crisis exists. Significant action must be taken and must be taken swiftly.”
Long and his Republican Senate colleagues used their Organization Day of the 2008 session to unveil a series of 14 bills, including 3 amendments to the Indiana Constitution, aimed at helping to solve Indiana’s property tax crisis. The Republican leader and the bills’ authors met during a mid-afternoon meeting with Statehouse reporters.
“Our goals are to cut property taxes and cap them permanently through constitutional amendments that Hoosier voters may ratify at the ballot box,” Sen. Bob Meeks (R-LaGrange) said. “For those of us who studied closely the prospects of totally eliminating property taxes, today is no small step, but a giant yet realistic leap forward.”
“Our reform package protects churches from losing tax exempt statuses, eliminates all state uses of property tax revenues and tightens controls on local government debt,” said Sen. Luke Kenley (R-Noblesville). “We are offering a plan to reform Indiana’s assessment system, replacing it with fair, uniform, accountable and professionalized county-wide operations. Our plan lessens the property tax burden by removing child welfare and much school operational funding and appropriately shifts those state responsibilities to the state budget. And finally, we offer options to local government we hope will be fairer to our senior citizens and young families—who are often seen by economists as being house rich and income poor—and therefore hardest hit by property tax increases.”
Long pointed out much of the legislation results from dedicated, in-depth work this year by Indiana’s bipartisan Commission on State Tax and Financing Policy that Kenley chaired and Meeks advised. Long said he has discussed many of the bills and concepts with Democratic Senate colleagues and House leaders of both party caucuses. He is hopeful that same legislative cooperation and cohesion can continue and result in “passage of perhaps the state’s most sweeping property tax reform ever.”
Here are snapshots of each proposed bill:
Joint Resolution 1: Proposed Constitutional Amendment to:
- Require the General Assembly to establish a 1% Circuit Breakers for Homesteads;
- Allow the General Assembly to enact credits and deductions to limit the tax liability for other property; and
- Permit the General Assembly to exempt a mobile home used as a homestead to the same extent as real property used as a homestead.
AUTHOR – Senator Kenley Committee: Tax and Fiscal Policy
Joint Resolution 2: Proposed Constitutional Amendment to provide that buildings and personal property predominantly used for religious worship are exempt from property taxes.
AUTHOR – Senator Miller Committee: Judiciary
Joint Resolution 3: Proposed Constitutional Amendment to prohibit the use of property taxes for common school purposes other than for transportation, capital projects and debt related to capital projects and employee retirement and severance liability.
AUTHOR – Senator Lubbers Committee: Appropriations
Senate Bill 1: Repeals the property tax levies for the County Child Welfare and the School General Fund beginning 2010.
AUTHOR – Senators Lubbers Committee: Appropriations
Senate Bill 12: Establishes statutory Circuit Breakers as follows:
- 1% - Homesteads (dwelling and the land up to 1 acre);
- 2% - Other Residential Property (buildings of 2 or more dwelling units, common areas shared by the dwelling units and the land on which the building is located; and
- 3% - non-residential real and personal property.
AUTHOR – Senator Kenley Committee: Tax and Fiscal Policy
Senate Bill 13: Standardized Public School Building Plans:
- Requires that a contract for professional services for design of school facilities must provide that any completed plans and specifications developed under the contract become the joint property of the person providing the services, the school corporation and the State of Indiana;
- Requires the DOE with the assistance of the State Building Law Compliance Officer to develop and update standard plans and specifications for the construction of school buildings and athletic facilities; and
- Requires State DLGF approval (in addition to County Review Board approval) for schools that elect to use a non-standard design for a school facility.
AUTHOR – Senator Hershman Committee: Tax and Fiscal Policy
Senate Bill 14: Repeals State property tax levies for the Indiana State Fair, State Forestry Fund and DLGF (for management of the Local Government Finance Data Base).
AUTHOR – Senator Boots Committee: Appropriations
Senate Bill 15: Extends the filing date from June 11 to Oct 1 for the following credits/deductions (begin Pay 2009 taxes):
- Homestead Credit and Homeowner’s Deduction;
- Mortgage Deduction;
- Elderly (aged 65 or older and surviving spouse);
- Blind and disabled; and
- Disabled veteran (and surviving spouse) and WW1 veterans
- AUTHOR - Senator Meeks Committee: Appropriations
Senate Bill 16: Property Tax Assessing Duties:
- Eliminates the office of elected Township Assessor on December 31, 2008 in townships where the assessor would otherwise be subject to election November 4, 2008;
- Provides that an individual holding the position of Township Assessor prior to November 4, 2008 may remain in office and serve as Township Assessor until the expiration of the individual’s term;
- Transfers assessing duties to County Assessors when a township Assessor vacancy occurs; and
- Provides that DLGF may approve contracts for professional appraisers in counties only if it determines the firm has a sufficient number of qualified employees and adequate training and experience.
AUTHOR – Senator Lawson Committee: Local Government
Senate Bill 17: Reforms the Tax Increment Financing Program:
- Limits bonds issued by Redevelopment Commissions to a maximum term of 30 yrs and Cap I to 2 years;
- Requires elected body approval of certain RC activities (use of eminent domain and consent to grant tax deductions, credits and abatements);
- Includes tax increments from a TIF area in the definition of “property taxes” for purposes of the petition and remonstrance process;
- Requires appointment of a school board member to an RC to serve as a non-voting advisor;
- Requires a finding that a TIF allocation area does not generate sufficient revenue to fund the original project in order to enlarge or expand the area;
- Requires an RC to annually notify the County Auditor of the amount of (excess) assessed value that could be reallocated to the other taxing units;
- Prohibits enlargement of an Economic Development Area unless it does not generate sufficient revenue to fund the original project; and
- Provides that an Economic Development Area must meet the criteria for an area in need of development.
AUTHOR – Senator Kenley Committee: Tax and Fiscal Policy
Senate Bill 18: Establishes controls and requirements for the issuance and management of local debt:
- Prohibits refunding bonds from final maturities that extend beyond the final maturity of the original bonds;
- Requires saving realized as a result of a refinancing to be used to repay debt or reduce debt levies;
- Requires annual level retirement of principle throughout the financing;
- Lowers the threshold that triggers County Project Review to the lesser of $7 million or .5% of taxable assessed valuation; and
- Limits local bond issues to a maximum term of 30 years and capitalized interest to 2 years.
AUTHOR – Senator Dillon Committee: Tax and Fiscal Policy
Senate Bill 19: Requires employers and individuals that remit individual income taxes to the Indiana Department of Revenue to separate (between the state and counties) amounts withheld or paid.
- Tax revenues are properly allocated to each county; and
- Requires that income tax withholdings for non-resident aliens must be based on no more than 1 exclusion regardless of the number of exclusions reflected in the taxpayer’s final tax return.
AUTHOR - Senator Kenley Committee: Tax and Fiscal Policy
Senate Bill 20: Technical changes in local levy controls (for additional work in committee).
AUTHOR – Senator Kenley Committee: Tax and Fiscal Policy
Senate Bill 21: Allows tax credits rather than tax rebates in counties where state-ordered reassessments are occurring in 2007 and delaying distribution of immediate relief to those property taxpayers.
AUTHORS – Senator M. Young Committee: Tax and Fiscal Policy
-30-
Senator Kenley audio clip: Tax reform package
Senator Meeks audio clip: Goals are to cut property taxes
Note to Editors: For your convenience, high-resolution photos of Sen. Long, Meeks and Kenley are available at http://www.in.gov/legislative/senate_republicans/images.html. |
