Last year, Indiana made a great start towards permanent property tax reduction. So far House Bill 1001 has reduced homeowners property taxes payable in 2008 by more than 30 percent across the 75 counties that put out tax bills.
This is remarkable achievement and is the largest tax cut in the history of Indiana. It marks the true beginning of less reliance on property tax by local government and lower bills for the taxpayer.
Now, we must pass Senate Joint Resolution 1, the constitutional cap that guarantees property-tax reduction will be permanent for all classes of taxpayers.
By passing the resolution in the General Assembly this year, it goes to the voter next 2010 for approval. An advantage to the legislature's passing it in 2009 is that it gives local units of government time to prepare for the change.
They either can cut expenses, combine services, to cover their costs, instead of using property taxes.
Last year HB 1001 passed 119-27, a large majority.
Some want to defer passing the resolution for another year, to "see what the impact is."
This is a disguised argument against making limits on property taxes permanent. We already know what the impact will be on local government and they have been given the options to deal with it. They should be planning now for the day when reliance on property tax is reduced.
Instead, they are hoping for some reversal of this decision so they can go back to higher property taxes every year.
The appeal to the Distressed Unit Board, has produced only five appeals so far out of the thousands of local units relying on property taxes in the State of Indiana.
Malysz has argued against the form of the circuit breakers - 1 percent to homeowners, 2 percent to other residential and farmland, and 3 percent to business.
The reason for the disparity is that homeowners are paying the lions share of the replacement taxes - the additional 1 percent on sales tax, so we have earned the relief.
Business under the plan get $220 million tax cut in 2010, even though corporations are exempt from most sales tax. Business will have the only constitutional protection in the United States under this plan.
Indiana is already rated in the top 10 for it's business tax environment and this constitutional guarantee will enhance that position and allow businesses a sense of certainty about property tax liability going forward.
Why does it need to be in the Indiana Constitution?
Because history shows that the reforms of today will be washed away tomorrow unless the taxpayers and voters themselves are in control of the decision.
More than 30 states have some form of cap, and more than 20 have it in their constitution.
Freedom Of Speech would like to say:
Let the voters decide. Call, or email your legislators now and let them know that you want SJR1 passed this session so that we can get on with permanent tax relief, and so that local government will quit stalling and prepare for the future with the tools they have been given.
