Gov. offers plan to cut homeowner property taxes by a third

Font Size:

BY PATRICK GUINANE
pguinane@nwitimes.com
317.637.9078 | Wednesday, October 24, 2007 | (15 comment(s))

INDIANAPOLIS | Gov. Mitch Daniels is asking Hoosiers to embrace a penny sales tax hike and tighter controls on local government spending in exchange for a complex property tax relief plan designed to trim the average homeowners bill by roughly a third.

The proposal presented Tuesday night, which will go before the General Assembly in January, would have the state assume $3.2 billion in school and child welfare costs now shouldered by local property owners. And homeowners would receive future protection, beginning in 2009, from a circuit breaker that would cap tax bills at 1 percent of a home's assessed value.

"As bold as these changes would be, I am very optimistic of achieving them, especially if you will help," Daniels said in a rare televised address. The governor said his vision is to usher in "a new era of opportunity in which Indiana is the nation's leader in defending and promoting the American dream of home ownership."

About two-thirds the cost of shifting school and welfare costs to the state would be covered by existing state sales tax revenues that now flow to local government in the form of property tax replacement credits. The proposed 1-cent sales tax hike, to 7 percent, would provide the final $928 million needed to pull off the switch.

Democratic House Speaker Pat Bauer, whose support will be needed to steer any tax relief package through the Legislature, praised some aspects of Daniels' plan, including the welfare portion. But Bauer, D-South Bend, worried too much local control might shift to the state with the school funding swap, and he criticized the Republican governor for not delivering a relief plan earlier in his first term.

"After three and a half years," Bauer quipped, "I want to welcome the governor to the debate and concern over property taxes."

A number of factors, including the elimination of the business inventory tax and new annual assessment system, came to a head this summer, driving residential property tax bills an average of 24 percent higher.

Daniels stressed that the solution to soaring taxes must go to the "root cause, and that is excessive spending." Toward that end, the governor proposed cementing his circuit breakers -- set at 1 percent for owner-occupied homes, 2 percent for rental properties and 3 percent for businesses -- in the Indiana Constitution.

He also proposed an inflationary cap on local government spending and a tighter review of construction projects, which would include a voter referendum process and oversight by county-level review boards.

His plan also would eliminate elected assessors. With 92 counties and 1,008 townships, Indiana has 1,110 elected assessors. Under Daniels plan, each county council would appoint one assessor, who would have to meet training standards set by state regulators.

State Rep. Chet Dobis, a Merrillville Democrat who has served in the Legislature since 1970, called Daniels' plan a "starting point" for debate on an issue sure to consume legislative business next session.

"I applaud the governor for being bold," he said. "Not everyone, including Democrats and some Republicans, is going to agree with every portion, but that's what the legislative process is about. It's a compromise."

Proposal highlights

-- Constitutional tax caps of 1 percent for owner-occupied homes; 2 percent for rental properties; 3 percent for businesses.

-- State sales tax would increase from 6 percent to 7 percent.

-- State would impose tighter controls on local government spending.

-- State would shoulder $3.2 billion in school and child welfare costs now shouldered by local government.

Read more

Read the governor's speech and background info about his property tax plan at http://www.in.gov/gov/3105.htm.

Back to story 15 comment(s)

Please note: Comments from readers will be screened and may not be posted immediately. If you don't see your comment perhaps:

It wasn't clear, concise or focused on the topic in the story.
It was a personal attack, vulgar, explicit or degrading, used actual or implied profanity or contained potentially libelous statements.
It accused someone of being guilty of a crime.
It promoted violence or illegal acts.
It contained telephone numbers or street addresses, or e-mail addresses and links to Web sites other than nwi.com or government agencies.

In no way do these comments represent the views of The Times or Lee Enterprises.

Passionate views, pointed criticism and critical thinking are welcome. Name-calling, crude and profane language and personal abuse are not welcome.

Reader comments will not be edited - they will be approved or declined. They may be used in the print edition of the newspaper.

If you feel a posted comment has violated these guidelines, please email our New Media team the commenter's name, the comment and a link to the article.

For more information please read our Terms of Service.

come on wrote on Oct 24, 2007 4:53 PM:

" So blame all the Republicans for job loss - how unions for keeping wages so high that some businesses would rather go overseas for cheaper labor. One of the biggest problems is the auto unions. 90% of your pay and be laid off for up to 6 months per year - how insane is that? Just wait till the teacher's unions/democrats get ahold of the idea of the state holding the cash for school spending. They will destroy Gov Daniels awesome plan and we will be back to high property taxes, unable to sell homes, buy homes, etc. "

too an Idea wrote on Oct 24, 2007 3:49 PM:

" If companies would stop outsourcing (thanks to the Repulicans) then people would still have their jobs, or be able to find new ones. Though there are a lot of people who do play the system and ruin it for the people who need it. Why not tax welfare? Why not get rid of Mitch who couldn't budget under Bush. If he couldn't do it for our country how did the idiots who voted for him expect him to be able to do it for a state? Funny how his area isn't getting a property tax increase proposal "

An idea wrote on Oct 24, 2007 2:16 PM:

" Hey I got a great idea.... cut out welfare to all the lazy, good-for-nothing people who have been draining the system for years... wow, what a concept.... and I really don't want to hear the sob stories that people really don't want to be on it but have no choice... yeah, you do... GO TO WORK!!!!! should save millions in taxes for those of us who already do. "

RetiredOE wrote on Oct 24, 2007 10:40 AM:

" I remember the first time the sales tax was put on. Quote " IT will be only for a year or two at the most" Now Mitch wants to raise it 1%. Next year it will be another 1% and so on. It`s the Bush philosphy of let me raise your taxes so I can maybe cut them later. "

Shirley wrote on Oct 24, 2007 9:56 AM:

" While the State is controlling local government spending, who is going to be controlling State spending? The governor didn't care about property taxes until Marion County homeowners were in his face about their recent increases, then it became an issue. When Indianapolis messed up Lake County's last reassessment, where were Mitch and the legislature then? "

East Chicago will find a way around this wrote on Oct 24, 2007 9:49 AM:

" Leave it up to EC to come a dollar under whatever is proposed for capital projects that would require a public referendum. Pabey = Pastrick. Got change - but for the worse . . . "

Senior Citizen wrote on Oct 24, 2007 9:30 AM:

" Governor Daniels .. Your plan sounds good, I pray it will fly and we get the long awaited relief. It is a shame that senior citizens have to sell their homes because they can't afford the rising taxes. The doctors and medical providers get most of our limited incomes and we can do nothing but pay to live. The 'Golden Years' have become the 'Rusty Years'. At a time in our lives when we should be enjoying the fruits of our lifelong labors we struggle to just keep above board if we can..and many can't. "

A "Daniels Democrat" wrote on Oct 24, 2007 9:28 AM:

" The recent property tax relief plan from Mitch Daniels is the only thing that has given me real hope of being able to stay in my home in the long run. It is sensible and fair and I am going to do everything in my power to make it happen. I am a life-long Democrat, but in Indiana next year, I will be a "Daniels Democrat". The only ones crying about this are the locals who fear they will lose control over big purse strings and unlimited spending. When property tax rates are as high as 10% a year, something is rotten in the state of Indiana! Thanks to Daniels for coming up with a bold, long-term and real fix. "

From Robertsdale wrote on Oct 24, 2007 8:32 AM:

" Sounds like a plan. But, don't stipulate capital projects must be approved by voter referendum. I truly believe there are too many complacent, nonprogressive, save $20 on their assessed evaluation people who would stop needed school projects and other plans necessary for future generations! "

Average Joe wrote on Oct 24, 2007 8:23 AM:

" I don’t trust any politician as far as I can throw them! But I can throw them out of office. Fire these ignorant and greedy politicians and give control back to the people! These liars always say one thing then do another and I am tired of it! Oh you see a increase in sales tax but I bet my granpappy’s soul you won’t see a dime back on yur property tax! Governent cut spending, lower taxes and give back to the people? Please I won’r be fooled again. Rich get richer and the poor get poorer, God bless America! "

Stan wrote on Oct 24, 2007 8:21 AM:

" Governor, what about vacant land. Will you leave that to be taxed at the 4.5 percent of my township rate? My small lot adjacent to my home should not be taxed any greater than my home!!!! "

Either way they get it wrote on Oct 24, 2007 8:19 AM:

" I am glad they are working on a new Property Tax and HOPEFULLY it will pan out this time BUT one way or another you can bet the Government will get more money from us. We are drownding here MITCH! Maybe we could also stop giving out more raises to our Government Officials!(now there's a thought) "

Trish wrote on Oct 24, 2007 6:16 AM:

" The Gov. raised the county taxes, now he is going to lower our taxes, i do not believe him, he is running for Gov. again, i will not vote for him! ! ! "

Let's Go Further wrote on Oct 24, 2007 6:07 AM:

" The Governor’s plan is ambitious in absorbing welfare and some school funding from property tax payers, but could go further by amending the Article 8 of State’s Constitution to keep fines and forfeitures local in a County School fund to assist in funding of school. Hundreds of millions of dollars are collected but simply disappear. Keeping this money local for local schools would provide additional funds to schools and a further reduction of property taxes. One key to property tax relief is to fund schools differently. Article 8 needs only to be amended by four words, “EXCEPT THE COUNTY SCHOOL FUND”. Come one legislators take a look at current laws and compliance to them, then ask for a quick audit of these funds at the local level; I think you will find an abundance of treasure at the end of this hunt. "

Abe Lincoln wrote on Oct 24, 2007 5:48 AM:

" Just do the Fair Tax and get it over with "

Related stories

Back to story 15 comment(s)

Post a comment Once your comments are approved, they will appear here.

Marketplace

Sections

Services

Other Publications

Search