STATEHOUSE REPORT FROM REP. PHIL GIAQUINTA
From the start of the 2008 session of the Indiana General Assembly, lawmakers have had one priority: lasting property tax relief for Hoosier families.
By the time the session came to a close (March 14), a plan had been approved, but I do not feel that it answers our property tax problems. In many cases it will add to our tax burdens rather then provide long-term reform.
House Bill 1001 is the vehicle for the governor’s property tax reforms. In the days and weeks to come, it will be lauded by its supporters as many things.
I do not agree with these claims. I voted against House Bill 1001 because I feel it doesn’t provide long-term, substantial relief.
In an election year, voting for this plan is the politically easy thing to do. However, I have to be honest and tell you that this plan doesn’t solve our problems. In many ways, it makes them even worse, and that is why I voted NO.
Supporters will say that the plan will reduce a homeowner’s property tax bill by an average of 25 to 30 percent. What they will not tell you is that in many places, the proposal will cut property taxes this year, only to increase them substantially next year, followed by cuts the year after that.
I do not believe that this elevator approach to property tax relief is the answer. It certainly does not meet the definition of permanent relief that the governor and other people who praised this proposal have talked about.
It is also important to remember that these property tax cuts are being financed through an increase in the state sales tax, as well as potential increases in local option income taxes.
When this tax shift first gained attention, House Democrats pointed out the inequities that this would cause for many working families, seniors and renters. We were able to include changes in House Bill 1001 that provide some protections, but there is a very good chance that the increases in sales and income taxes will be greater than the savings in property taxes.
I also must admit that I am worried about the harm that may come from capping the amount of revenue that can go toward local schools and units of government. These could lead to cuts in school programs or reduced fire and police services.
This program, which carries a hefty price tag, is going into effect at a time when the national economy is slowing down. We’re already seeing the impact in Indiana, where state revenues are more than $80 million behind projections and the state has not met its revenue targets in six of the last seven months.
If these downward trends continue, it will be difficult to write a new state budget when the Legislature returns in 2009. In the months between now and then, we will have plenty of opportunities to see the financial impact of the governor’s plan and determine whether more actions need to be taken.
Over the years, there have been many programs touted as “the answer” to Indiana’s property tax relief crisis. Every time, it turns out that legislators have to return a few years later and provide another “answer.”
I do not believe House Bill 1001 is the answer for property taxpayers. I believe we are going to be addressing property taxes again in very short order.
If you want to talk to me about property tax issues or other matters that have come before the Legislature, you can call using the toll-free Statehouse telephone number of 1-800-382-9842, e-mail me at H80@in.gov or write to me in care of the Indiana House of Representatives, 200 W. Washington St., Indianapolis, IN 46204.
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