On to the referendum: Constitutional amendment for property tax caps

Today the Indiana Senate approved a resolution by a vote of 35-15 to place the already-enacted property tax caps into the state constitution. While one more vote in the General Assembly is needed to push this proposal on to the governor, the conventional wisdom at the statehouse is that this question will go to voters as a referendum this November.

What is most important now is that voters fully understand the proposal and the implications. There are a myriad of arguments for and against the caps themselves, and even more contention over placing the caps in the constitution.

A message from Senate Democrat Leader Vi Simpson on today’s vote

 

One of the prevailing concerns is that the long-term impact of the caps remains unknown. Let’s begin with a few questions we heard posed by lawmakers today…

• How do we know that the 1-2-3% caps are the right levels?
• If only 4% of the tax cap credits went to homeowners, is this the right answer?
• How will imminent cuts in local services impact residents?
• What is the impact on our farms and businesses which are now capped at higher levels than homesteads?
• Will the property tax caps hurt the state’s economic development efforts?
• Will the increases in the sales tax and local income taxes overcome the property tax savings realized for Hoosiers?

Audio: IPBS Legislative Preview

The partnership of Indiana Public Broadcasting Stations (IPBS) recently produced their 2010 Legislative Preview. This great series covers a number of big issues facing the Indiana General Assembly and includes interviews with a number of legislators, including our own State Senator Greg Taylor.

Click the play buttons below to listen.

2010 Legislative Preview – Full Audio

By chapter:

Introduction

Economic Impacts on the Legislature (featuring State Senator Greg Taylor)

Constitutional Amendment for Property Tax Caps

School Start Date

Funding Higher Education

Ethics Reform

Legislative Redistricting

Mass Transit

Driver’s Education

Gaming

Taxation

Closing Comments

Special thanks to IPBS for permission to feature on The Briefing Room!

Audio: Debate on property tax caps continues

The Senate Tax and Fiscal Committee voted to move SJR 1 – a proposal to place already enacted property tax caps in the state constitution – for further consideration by the full Senate. The vote was 9 to 3, with three Senate Democrats voting against the measure.

State Senator Tim Skinner of Terre Haute told the committee the caps are currently in statute and those who are going to benefit are already doing so. He said the amendment is being sold to the public as a tax savings but he questions that assertion, citing the increase in sales tax, user fees, and local income taxes. He says this is merely a tax shift and that the state should not rush to put the language into the state constitution.

Listen to Skinner’s statement:

State Senator John Broden of South Bend says he applauds the intent of reducing the reliance on property taxes, but he does not believe that this plan targets the relief to the homeowner as intended. Broden noted recent figures that indicate only 4% of the relief from property tax caps is going to homeowners.

Listen to Broden’s statement:

In the News: Tax & Fiscal Committee Meeting

The first committee meeting of the 2010 session – held more than a month before the General Assembly is set to reconvene – brought more questions than answers on two of the big issues facing lawmakers. The Senate Tax and Fiscal Committee met Dec. 1 and heard little testimony about a proposal (SB 23) to delay of 2009-passed unemployment insurance reform and a constitutional amendment (SJR 1) for the already enacted 1-2-3% property tax caps. A quorum was not present for the meeting, so no other action was taken.

Senate Democrat Tim Skinner (Terre Haute) expressed his concerns over unintended consequences of the property tax caps, including harmful cuts to Indiana schools. As covered in the Fort Wayne Journal Gazette:

Libby Cierzniak, a lobbyist for Indianapolis Public Schools, pointed out that schools are allowed to use property tax revenue from the capital levy to cover utility costs and heating.

“You can’t tell me that keeping the lights on and heating the schools are not core educational costs,” she said.

Cierzniak also said that several poorer districts in the state will see devastating cuts.

Sen. Tim Skinner, D-Terre Haute, said it is unwise to rush into amending the state constitution without first seeing the practical effects and unintended consequences.

“But here we are rushing to make a decision that has more personally to do with politics than it does policy,” Skinner said.

“We are going to suffer as a result of this. It’s wise to let this situation play out.”

The committee is scheduled to meet again on Dec. 8 at 1:00 p.m.

Early start to session?

The Senate Tax and Fiscal Policy Committee and House Ways and Means Committee have already been assigned big issues on the first official day of the 2010 session. We’re hearing that these committees may begin hearings in December on some of the following bills – before the General Assembly reconvenes on Jan 5. Is this a trend for Indiana’s part-time legislature?

Two bills filed in the Senate on Tuesday:

SJR 1: Constitutional amendment for already enacted 1-2-3% property tax caps
SB 23: Delay of unemployment insurance employer contributions changes by one year

Five bills filed in the House on Tuesday:

HJR 1: Constitutional amendment for already enacted 1-2-3% property tax caps
HB 1001: Ethics reform on lobby gifts, legislator to lobbyist transitions, and political contributions by state contractors
HB 1002: Worker Preference on public works projects
HB 1003: Halts the contracting and privatization of services for FSSA’s Medicaid and Food Stamp program
HB 1004: Limit the annual increase of homestead and farmland assessments

To track legislation visit http://www.in.gov/legislative/