Hoosiers are a step closer to property tax relief after the Indiana House of Representatives on Thursday passed House Bill 1001 by a vote of 93-1. The bill now heads to the Indiana Senate.
The bill contains about $700 million in new property relief, along with $250 million in already scheduled relief for 2008 and about $300 million in relief in 2009. The immediate relief should cut most homestead property tax bills by about one-third.
It also removes school operating and transportation funding and child welfare funding from local property, shifting the responsibility to the state.
"Immediate property tax relief took a major step forward today," said Rep. Tom Dermody (R-LaPorte). "As this proposal moves toward a tangible form, we must remain vigilant in controlling state spending and growth. I am pleased that this proposal includes the assumption by the state of unfunded mandates such as the K-12 school operating fund. Although we are still early in the legislative process, this marks the first vote toward permanent and long-lasting property tax relief."
Several elements of the bill supported by Rep. Dermody were eliminated or altered in the final bill, such as state spending caps.
"If the state is going to ask local government to limit their spending, it is only fair for state government to play by the same rules. Taxpayers expect and deserve a fair and equitable system of budgeting. The state must operate within its means, and limiting budget increases would ensure state government is not spending more than Hoosiers can afford," said Rep. Dermody.
Although the bill has been changed from its original form, it still contains several elements that Rep. Dermody has fought for. It offers immediate property tax relief, and includes caps on property taxation.