By Eric Bradner, Evansville Courier & Press
INDIANAPOLIS - Though Democrats who control the Indiana House are nervous about the effects that constitutional property tax caps would have on local governments, they started a charge Monday toward an early 2010 vote that would give voters the final say.
The House Ways and Means Committee is meeting today at the Statehouse, hearing from supporters of amending Indiana's constitution to include property tax caps and opponents. Delayed because Indianapolis roads were slowed by snow, fewer than half of the committee's 25 members were in attendance as the meeting started.
The fiscal panel will not vote on the caps Monday, but its chairman, Rep. Bill Crawford, D-Indianapolis, said it will vote on the constitutional amendment prior to the legislative session's Jan. 5 beginning. If it wins the panel's approval, the amendment moves to the full House, where Speaker B. Patrick Bauer, D-South Bend, has signaled he will give it a vote.
Meanwhile, the Senate Tax and Fiscal Policy Committee planned to vote on the amendment Tuesday. Since Republicans control that chamber, it is expected to easily win passage both in that panel and in the full Senate.
State lawmakers in 2008 voted to phase in property tax caps of 1 percent for homes, 2 percent for farms and rental property and 3 percent for businesses. According to estimates by the Legislative Services Agency, the General Assembly's non-partisan research arm, those caps would save property taxpayers - and cost local governments - $465 million in 2010 and $488 million in 2011.
Lawmakers also voted in 2008 to amend those caps into Indiana's constitution. To complete that process, the amendment needs to be passed by both the House and the Senate this year and approved by voters in a November 2010 statewide referendum in order.
Democrats have long argued that while property tax caps might save homeowners money, the steps the state has taken to make up for that loss, such as raising the sales tax from 6 to 7 percent, simply shift the burden.
They point out that allowing local governments to increase other taxes could amount to a tax shift, not a reduction.
Rep. Ed Delaney, D-Indianapolis, raised questions about whether Indiana's system of allowing counties to adopt local-option income taxes does just that.
"Is it fair to say that our local option income tax system is not designed for the constitutional amendment we're talking about passing?" Delaney said.
Democrats have argued that if tax caps are to be written into Indiana's constitution, they must be coupled with legislation preventing property assessments from rising wildly from year to year.
House Bill 1004, which would cap the amounts assessments could increase, was scheduled to be considered Monday as well. However, due to snow, that bill's author, Democratic Rep. Dale Grubb of Covington, could not attend. Instead, lawmakers will discuss it Wednesday.