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INDIANAPOLIS – House Republicans offered up a blueprint for a special legislative session Tuesday that includes spending an additional $200 million in state surplus revenue for property tax relief.
“We are proposing immediate short-term relief for those Hoosiers who are taking it on the chin right now,” said House Minority Leader Brian Bosma.
Homeowners statewide are facing average increases in their property tax bills of 24 percent, with some counties seeing even bigger jumps.
A number of factors have collided to create the higher-than-usual increases, including a state cap on property tax relief, the final elimination of the inventory tax and the updating of property values through a new process called trending.
Gov. Mitch Daniels, in Columbia City on Tuesday, said he is open to the House GOP’s plan, but not before other options are explored.
Legislators in April approved $300 million in relief to be sent via rebate checks to Hoosiers with owner-occupied homes in December 2007 or early 2008. Initially the delay was necessary for cash-flow purposes until the state had received the cash Nov. 1 from two horse tracks purchasing slot licenses.
Plus, the rebate would contain specific language saying the money was coming from the state General Assembly. But since then, state officials revealed Indiana is running a sizable surplus.
Daniels has suggested calling lawmakers back into session to change the rebate to a credit on homeowners’ fall bills – possibly targeting the relief to those hardest hit using a circuit breaker approach.
Under this plan, homeowners would not have to find the money to pay the tax bill before receiving some of it back. “I think we’re close to a solution,” Daniels said. “That may or may not require a special session, but I won’t hesitate to call one if necessary.”
Senate Republicans and House Democrats – the majority caucuses in the chambers – continue to believe there is not enough information or a consensus on a plan to have a special session.
“This is a chaotic situation we have,” said House Speaker Pat Bauer, D-South Bend. “We know there is chaos in Indianapolis, but most of the state doesn’t have their bills.”
The House Republican plan consists of five proposals:
•Convert the $300 million rebate to a credit on fall bills except for the four counties statewide in which reassessments have been ordered. Those taxpayers would see the credit on a reconciliation bill likely issued in May 2008.
•Extend the deadline for filing for the homestead credit, which substantially reduces homeowner property tax bills statewide. Hoosiers were supposed to file last year for it to be effective on the 2007 bills, but House Republicans want to extend the deadline to Sept. 15. The change would cost the state $50 million.
•Grant local county councils the ability to apply the $300 million worth of credits to those individuals and communities hardest hit by recent tax increases instead of parceling the money out to everyone.
•Freeze the child welfare levies and have the state pay for all levy increases for 2007 and in the future for this state program. This would cost the state $50 million.
•Add an additional $100 million in state money toward immediate residential property tax relief to be distributed as a credit by local county councils on the fall tax bills.
Bosma conceded he is advocating the state spend $200 million from the state surplus in additional relief, but he said the state can afford it.
Daniels’ chief of staff, Earl Goode said it is important to protect the surplus, which has taken years to build. But he said nothing has been ruled out.
Allen County Councilman Cal Miller, R-4th, said he welcomes any relief that comes to the county.
He said the council has not discussed such a situation, but he doesn’t believe a specific chunk of tax relief should be given to Aboite Township residents dealing with average increases of 57 percent in tax bills.
Much of that increase is because they are paying city taxes for the first time after being annexed, and a school-related tax increase.
“Focusing relief on Aboite Township would be unfair. There are other areas annexed by the city whose property taxes have increased, yet by the virtue of the timing of this, Aboite Township would be standing in front of the line,” Miller said. “If I had to decide today, it would be an equal distribution to all taxpayers who own homes in Allen County.”
nkelly@jg.net
