[r20] Dermody Unveils Plan For Immediate Relief (7/30/2007)

(Statehouse) July 30, 2007 - State Representative Tom Dermody (LaPorte) has been working with local officials to create a plan that offers taxpayers immediate relief. Under the proposal, the rebate program would be eliminated for an immediate homestead credit.

"The people of Indiana are rightfully frustrated with the property tax situation, and action must be taken to help alleviate property owners from the burden of increased taxes," said Rep. Dermody. "While there needs to be a long-term overhaul of the entire property tax system, there also needs to be a solution to the immediate tax problem. This plan offers taxpayers immediate relief for their skyrocketing property tax bills. Hoosiers should not have to pay their entire bill first and then wait until next year; that is an ill-conceived plan. People on fixed incomes and those who are living one paycheck to the next cannot afford to pay their tax bill."

Rep. Dermody offered the following plan to provide immediate relief

For counties who have already mailed tax bills:

• Minimize administrative costs to counties by eliminating the tax rebate program, and instead offer a credit to taxpayers by applying the credit to the second installment of their property tax bill.

For counties who have not mailed tax bills:

• Combine semi-annual payments into a single property tax bill issued in September with a credit, with an extension of the due date to November 10. This enables schools and local governments to receive funding this year, without taking loans and incurring costly interest rates that would increase property taxes next year.
• Minimize administrative costs to counties by eliminating the tax rebate program, which potentially could cost $50,000 per county, and instead offering the rebate to taxpayers in the form of a credit against their single annual property tax bill.
• If an order for reassessment is directed, freeze tax rates at 2006 levels, with the state assisting local governments with any budget shortages incurred, and first reassess areas where school districts overlap with other counties. The credit would apply once the county tax rate is certified by the Department of Local Government Finance.

In order to finance this, once the tax rates are certified, the state General Fund can loan the Property Tax Reduction Fund $300 million, the amount originally dedicated to the rebate program for 2007. Once funding is secured from the horse tracks in November 2007, the money will then be repaid to the General Fund.

"I strongly agree that legislative leaders need to have an agreed upon solution before we are called into a costly special session," continued Rep. Dermody. "A special session should only be called in order to pass immediate property tax relief. Leadership on both sides of the political aisle must agree on a plan that brings immediate relief. LaPorte Treasurer Ken Layton, LaPorte Auditor Theresa Shuter, Rita Layton, and the LaPorte assessor's office were very helpful in crafting a plan that will work. Finger-pointing and attempting to deflect blame from one entity to another is counter-productive and does little to benefit Indiana taxpayers, and communities as a whole. People want solutions now."