By Bryan Corbin, Evansville Courier & Press
NDIANAPOLIS - Saying a special session of the Legislature to deal with property tax relief is "very unlikely," Gov. Mitch Daniels announced another short-term relief measure: extending until Oct. 15 the deadline for homeowners to apply for homestead deductions and credits. Long-term relief will likely have to wait until the next regular session in 2008.
Daniels said homeowners who missed the original June 10 deadline would face the "double whammy" of big increases on their 2008 property taxes without the homestead deductions and credits they were entitled to. So he has directed county auditors to accept such applications through Oct. 15.
"I think basic fairness says this is a reasonable step to take," he said.
Vanderburgh County Auditor Bill Fluty said most of the county's 50,000 homeowners already have met the deadline.
The standard homestead deduction reduces the taxable value of an owner-occupied home by as much as $45,000. For a hypothetical Vanderburgh County home assessed at $100,000, Fluty said, without the homestead deduction and credit, the tax bill would be $2,384.90. With them, the same homeowner would pay $974.40, he said.
The homestead deduction applies only to the homeowner's primary residence as of March 1. Once obtained, the deduction and credit are in effect for as long as the owner lives in the same house; and homeowners need not reapply, Fluty said.
Extending the deadline is the latest in a series of property tax relief measures the governor and other officials have announced over the past two months, amid mounting homeowner anger over high tax bills.
Because of new reassessment rules and the inventory tax phase-out, property taxes were projected to increase by an average 24 percent statewide, although the Legislature in April agreed to give residents $300 million in tax rebates to soften the blow. Also a number of counties have been ordered to reassess again after the state Department of Local Government Finance found previous reassessments were flawed.
Daniels said he will ask the Legislature to ratify the homestead deadline extension retroactively during a one-day organizational session in late November.
"The soundings I've taken say the legislators on both sides think this is a fair, reasonable thing to do. I don't think we're going to run into any opposition or delay," Daniels said.
Earlier in the summer, Daniels, a Republican, suggested a special legislative session to consider other relief measures - possibly by converting the tax-rebate checks into an immediate tax credit or targeting relief. But Daniels said Wednesday he now thinks a special session this fall is "very unlikely."
He said Indiana House Speaker Patrick Bauer, D-South Bend, would not budge on the rebate-check program.
"The Speaker authored the rebate, likes the rebate and insists on keeping the rebate, so a rebate it is," Daniels said.
The $300 million property tax rebate program is funded through casino licenses at horse tracks, revenue the state won't receive until November, Bauer has said. Bauer also noted that targeting the relief now would be difficult because many counties have yet to send out this year's bills, and some have been ordered to do reassessments.
Instead, broader changes to restructure the property tax system likely will have to wait until the next regular session of the Legislature, which reconvenes in January. Daniels said he will make a long-term proposal for legislators to consider in 2008.
"All I can tell you is, we will only look at options that will make a fundamental difference," the governor said.
Though he hasn't laid out his plan yet, Daniels said he would not rule out the idea of replacing some property taxes with some sales or income taxes, but only if it were at least a dollar-for-dollar decrease.
"I won't support anything that results in a net tax increase. If we're talking about changing the mix - less property taxes, offset by something else - that is discussable," the governor said.
As for Vanderburgh County, Fluty said officials are on target to issue rebate checks in February, although the amounts won't be determined until after November.
"Our goal is to get them out as quickly as possible," he said.
The Associated Press contributed to this report.