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.
"Moving the property tax relief plan forward marks a monumental step toward providing true relief for Hoosiers," said Rep. Rich McClain (R-Logansport). "This is the first of three steps needed to finalize the bill, and I expect to see many changes made as this bill moves to the Senate.
"For the final phase, the bill will be heard in a conference committee of both legislative houses, where further enhancements will be made. I am optimistic that this property tax reform will result in true, tangible relief, the greatest our state has seen in 35 years."
Several elements of the bill supported by Rep. McClain were eliminated or altered in the final bill, such as a state spending cap and a strong referendum process. The bill does not have a state spending cap, and voters would be allowed to vote only on school projects not directly related to classroom learning, such as athletic fields.
Although the bill has been changed from its original form, it still contains several elements that Rep. McClain has fought for. It offers immediate property tax relief, includes caps on property taxation and includes at least some form of public referenda on public spending.