STATEHOUSE (March 14, 2008) - Hoosier taxpayers will see immediate property tax relief, and the process for permanent property tax reform has begun.
The immediate relief is in the form of homestead property tax credits at a statewide average of almost 30 percent, $1 billion removed from property taxes, strict caps on property tax rates and controls on public spending.
The House of Representatives voted to pass committee reports for House Bill 1001 (82-17) and Senate Joint Resolution 1 (79-20).
"The average Hoosier homeowner will save close to 30 percent on their property tax bill, and those savings begin this year. A total of nearly $1 billion dollars will be put back in the wallets of Hoosier property owners," said Rep. Bruce Borders (R-Jasonville). "In addition to the immediate savings being offered by House Bill 1001, permanent caps are being placed on taxes for residential, rental and business properties through Senate Joint Resolution 1.
"Of huge significance to property owners, we were able to take the first step toward placing constitutional caps on the tax rates for homes, rental properties and businesses. Hoosier taxpayers took priority for me as I voted to control government spending. As we all know, there is only one way to control government growth, and that is to limit the flow of taxpayers' dollars to it. The man or woman who earned the dollar has the right to determine how it's spent."
House Bill 1001 empowers voters to have a say on building projects that greatly affect their wallets, and it closes spending loopholes and improves oversight on local budgets.
These are highlights of the property tax plan:
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.
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.
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.
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.
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.