State Senators — Republicans and Democrats alike — committed at the onset of this 2008 Session that property taxes would be “job one.” Hoosiers should know we are hard at work and will not stop until the job is done.
Legislators know Indiana’s antiquated tax system — which dates back to the agrarian 1800s when property translated into income — is in dire need of repair if not eventual repeal. It is unacceptable fellow Hoosiers are losing their homes or facing life-changing decisions due to unaffordable and unexpected property tax bills.
This marks the fourth consecutive Session many of us have attempted to address the complexities of property taxes. Earlier reforms have not garnered enough public support and political will to prevent the crisis too many Indiana property owners face. This year, public support and political will must prevail.
Local and state leaders owe it to our homeowners, businesses, farmers, landlords and renters to work together to cut and cap property taxes, control local government spending and allow voters to weigh in at the ballot box on large government construction projects.
As leaders of both Senate caucuses, we speak for our Senate colleagues when we say property tax relief and reform is too important to be hindered by partisanship and political posturing. Fortunately, the Indiana Senate has a reputation and record of bipartisanship and bold proposals. Last year, Senators passed 97 percent of bills with bipartisan support. Gridlock and bickering can not and should not stand in the way of property tax relief and reform.
Indiana’s current state budget includes a record $2.1 billion in traditional property tax replacement to help fund local government. Another $550 million is appropriated over this year and next to help offset local property tax increases. Some property taxpayers are already seeing the additional, direct relief in their mailboxes in the form of a state-funded rebate check. Most taxpayers should soon receive their checks or in a few cases, the tax relief will come as a credit on their property tax bill.
This year, we are working to shift child welfare costs and remaining school operations expenses to the state budget. These reforms would provide additional relief to property taxpayers and better align state responsibilities with state budgets. Also, to achieve accuracy and fairness in property assessments, reforms include combining duties of Indiana’s 1,100 separately elected assessors, adding professional experience and educational requirements to their job descriptions, and making assessment software uniform and compatible statewide. Other key reforms include closer public scrutiny of spending and debt, as well as increased taxpayer participation in decisions to proceed or not with large government construction projects.
Total repeal of property taxes — as some Hoosiers and legislators would like to do — requires raising about $7 billion in income and sales taxes resulting in tax rates economists say would drive away workers and employers. Especially at a time when Indiana’s economy remains fragile, lawmakers must be certain of intended and unintended consequences. Presently, more questions than answers surround this concept of property tax repeal. However, the issue of repealing property taxes entirely remains a worthy long-term goal.
Hoosiers who are closely following progress of property tax relief, reform and possible repeal, know that lawmakers have worked diligently for the past 18 months on this issue. The Senate will continue to “burn the midnight oil” until we get the job done. Hoosier taxpayers should expect nothing less.
State Sen. David C. Long (R-Ft. Wayne)
Senate President Pro Tempore
State Sen. Richard D. Young (D-Milltown)
Senate Minority Floor Leader