Permanent reform is contained in Senate Joint Resolution 1, which begins the process of adding permanent rate caps to the Indiana Constitution.
"It is with great relief to report that permanent and substantial property tax relief has passed the House today. Indiana has been striving toward this goal for more than 30 years and taxpayers' voices were finally heard," said Rep. Rich McClain (R-Logansport). "I am delighted with the bipartisan manner in which this bill was discussed and handled. Furthermore, I am confident that Hoosiers will be pleased with our definitive solution forever reforming the property tax system.
"This bill provides the relief that taxpayers have so long deserved, by cutting property taxes by over 30 percent statewide. This cut must remain permanent, which is why I voted to move the constitutional amendment forward."
House Bill 1001, which was based on the House Republicans' Standards for Success and Gov. Mitch Daniels' property tax blueprint, empowers voters to control local spending through referenda, and it closes spending loopholes and improves oversight on local budgets.
These are highlights of the property tax plan:
n Help for Hoosier homeowners. The plan features $620 million in immediate relief for 2008, $1 billion removed from property tax levies, referenda that empower voters to control or allow spending and a constitutional guarantee of property tax caps. There also is $140 million of relief in 2009, and $80 million of relief in 2010.
n Help for all Hoosier property-tax payers. Cut now and cap forever. The plan, in addition to immediate relief, forwards the process of permanent caps through a constitutional guarantee of property tax caps. SJR 1 begins the process of permanent caps of 1 percent of assessed value for homesteads, 2 percent for rental and agricultural properties and 3 percent for all others.
n Help for local governments. The plan, at the county level, removes from property taxes the costs of four child-welfare levies, juvenile incarceration and health care for the indigent. At the municipal level, it removes the remaining pre-1977 police and fire pensions from property taxes, and it includes support for police and fire services.
n Help for Hoosier schools. The plan removes school operations and special education preschool costs from property taxes. It also includes $120 million in circuit-breaker relief and $400 million in tuition reserve fund money.
n Help for low-income Hoosiers. The plan includes an overall decrease in taxes for low-income taxpayers, renters' deductions, caps for low-income senior-citizen homeowners and earned income credits.
HB 1001 now goes to Gov. Daniels, who has expressed support for the plan.
SJR 1 will be presented to the next General Assembly. If the same version passes that Legislature, it will be placed on the statewide ballot for all Hoosier voters. If they approve it, the caps will become part of the state Constitution.