STATEHOUSE, Feb. 3, 2009 - Did they forget?
Last Thursday, the Indiana House of Representatives had an opportunity to give voters a chance to make property tax caps part of the state constitution.
We didn't get to vote on the caps, and it looks increasingly likely that neither will our fellow Hoosiers.
A Republican maneuver to force a vote on the issue was thwarted by House Speaker B. Patrick Bauer, D-South Bend. His decision to prevent a vote on the caps was upheld along party lines. Most of the Democrats who supported the speaker's avoidance tactic voted for the caps less than a year ago. Did they forget?
I'm confident most of them still support the caps. They were in an awkward position Thursday. Had any Democrats broken party ranks and voted against the speaker, they would have been punished accordingly.
To change the constitution, two consecutive, separately elected legislatures must adopt the same language. If they do, the proposed change then goes on the ballot and voters have the final say.
In its 2008 session, the General Assembly adopted language that would cap property taxes for homeowners at 1 percent of a home's assessed value. So, for example, the annual taxes on a home valued at $150,000 would be capped at $1,500. Taxes on rental property and farmland would be capped at 2 percent, and taxes on other business property would be capped at 3 percent.
A Republican-introduced House resolution containing language identical to the language that was passed last year is stuck in the House Rules and Legislative Procedures Committee, the place the speaker sends legislation to die.
Meanwhile, over in the Republican-controlled Senate, the language passed out of committee last week and was on its way to adoption by the full Senate. Once adopted, it will go to the House, where it is not likely to get a hearing.
Speaker Bauer's unwillingness to allow a vote on the caps is a slap in the face to taxpayers, who have been getting slapped a lot lately.
The battle cry in last year's General Assembly was, "Cut now. Cap forever." The legislature accomplished the first mandate by raising the sales tax 17 percent and making sweeping changes to how local and state government are funded. There was bipartisan commitment to capping property taxes, and the legislature took the first step toward amending the constitution. The vote in the House was 79-20, and most of those representatives are still there. Did they forget?
The speaker argues that we should wait another year to see how the caps will affect local government before taking the next step toward making them part of the constitution. There is no election this year, so Hoosiers would be voting on the constitutional referendum in 2010, regardless of whether the legislature adopts the necessary language this year or next.
Delay by the legislature will only create more uncertainty for both taxpayers and local governments. Responsible elected officials at the local level are already looking for ways to adjust their spending under the caps. Others are hoping additional delay will cause the caps to fail.
That would be a shame. Indiana doesn't have a good record on property taxes. Every temporary fix has led to the need for another temporary fix within a few years. Making caps a part of the constitution would give taxpayers a level of security we have never enjoyed.
Are caps the best we can do? Not in my opinion.
So long as property values increase, property taxes will increase. Since the caps limit taxes to a percentage of a property's assessed value, when the value goes up, the taxes may increase proportionately.
Also, even with better assessment methods, it's tough to place a value on property, and unfair assessments will persist. I'm uncomfortable with the way in which the caps discriminate among property types. And assessing property and collecting property taxes costs hundreds of millions of dollars a year statewide. I'm sure we could find better uses for that money.
I look forward to revisiting the possibility of eliminating property taxes, but that won't happen until we move past the debate over caps. In the meantime, if we have to have property taxes at all, better that they are capped.
In the constituent survey I mailed out last month, there was a question about caps. I received almost 1,100 completed surveys, and 72 percent of those who responded supported a constitutional amendment capping property taxes. Seventeen percent were against it, and 11 percent had no opinion.
I'll share the rest of the survey results in next week's column.
When it comes to caps, the voters haven't forgotten, and if a few politicians choose to forget last year's promise to taxpayers, they should expect voters to remember.