(AP) — State legislators approved a proposal Tuesday that could put property
tax limits into Indiana’s constitution. Voters will have their say in
The state Senate
voted 35-15 without debate Tuesday to send the issue to a voter referendum,
the last phase in a process started after what many called a property tax
crisis in 2007. Bills skyrocketed in much of the state that year because of
new assessment rules and other factors, sending hordes of homeowners to the
Statehouse demanding reform.
A state law
passed in 2008 and fully implemented on Jan. 1 of this year limits property
tax bills to 1 percent of homes’ assessed value, with 2 percent caps on
rental property and 3 percent limits on business property. Both opponents
and supporters say putting the caps into the constitution will make them
harder to undo in the future.
resident Bruce Muller said he wants the caps in the constitution to help
protect him from big, unexpected increases like he saw during the tax
crisis, when his property tax bill jumped from a couple of thousand dollars
a year to $7,000. Muller, whose home is assessed at more than $300,000,
noted his tax bills may still increase with the caps if his assessed value
goes up. But he said putting the limits in the constitution would prevent
lawmakers from going back on their pledges to fix property tax problems.
“I don’t trust
the politicians,” he said. “After all the brouhaha dies down, they could go
back to their old ways.”
voters to overwhelmingly approve the proposal. Sixty-four percent of Indiana
residents surveyed in December by Ball State’s Bowen Center for Public
Affairs favored the constitutional amendment.
But there are
plenty of opponents.
Chamber of Commerce and Indiana Farm Bureau oppose the caps because they
think it’s unfair to treat commercial and residential property differently.
Many mayors have opposed the caps, pointing out that money saved by
taxpayers is less cash for city budgets.
hasn’t yet decided whether it will launch a public campaign urging people to
vote against the caps, Chamber President Kevin Brinegar said.
“We’ve got to
decide whether there’s some reasonable chance or whether we’re just throwing
resources down a rat hole,” he said.
University political science professor James McCann noted that off-year,
low-turnout elections typically draw more committed voters who have already
made up their minds.
“This issue is
already going to be on their radar,” he said. “Anybody who has a lot of fire
in the belly one way or another for this issue would already be activated.”
Mayor Sue Murray worries that many voters will think they are simply voting
for lower tax bills without understanding the full consequences of the caps.
Cities around the state have blamed recent layoffs and other cost cutting
measures on reductions in property tax funds.
Murray said that
because the tax caps were not fully implemented until Jan. 1, lawmakers and
others have little data on their true effects. Putting those caps in the
constitution will tie the hands of future lawmakers who might need to change
Indiana’s tax structure more quickly than could be done with the years-long
constitutional amendment process.
“It’s not just
about the short term,” Murray said. “It’s about making a decision that’s
wisest for future generations of Hoosiers.”