(STATEHOUSE) Jan. 24, 2008 - 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.
"I am glad that the House began our work today by putting property tax relief ahead of all other legislation," said Rep. Bob Behning (R-Indianapolis). "This bill is only the first step as we move to dramatically reform taxation as we know it in Indiana. HB 1001 passed in a bipartisan manner, but was loaded with significant spending on issues well beyond the original bill as introduced by the governor. The referendum process for school building construction was deleted and there is no spending cap for state government. It is early in the process, but I am still working for ways we can take the next step to eliminate homestead property taxes."
It also removes school operating and transportation funding and child welfare funding from local property, shifting the responsibility to the state.
Several elements of the House Republicans' Standards for Success 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.
"This property tax bill is a step in the right direction," said Rep. Jon Elrod (R-Indianapolis). "It will provide significant relief to homeowners and renters. It does not go far enough though and some of the amendments were unacceptable. As the bill moves forward, I would like to see some of the excess spending projects cut. I also will work to include a state spending cap. It is important that we manage government growth, which is the only way to ensure taxes will stay under control. Overall, I voted in favor of this work in progress and look forward to favorable amendments in the Senate."
Although the bill has been changed from its original form, it still contains several elements that House Republicans have 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.