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Republican lawmakers on Tuesday released the following $200 million proposal to provide tax relief for Hoosier property owners. The GOP has asked Gov. Mitch Daniels to call a special session of the General Assembly to adopt the plan.
•Replace Rebate Check with a Credit – Credit to be applied to November 2007 property tax bills. For counties being reassessed, credit would be held until reassessment completed and applied to reconciliation tax bill (likely issued with May 2008 tax bill).
•Homestead Credit/Deduction Fix – Make all filed, but not yet effective, Homestead Deduction/Credit requests automatically effective for Pay 2007 taxes. Extend filing deadline for claiming this relief in Pay 2007 to the later of September 30, 2007 or 45 days prior to the due date for the final Pay 2007 tax bill issued by a county.
•Local Flexibility in Application of $300M Supplemental Tax Relief – Each county would be allocated its percentage share of the supplemental relief based on the existing Homestead Credit calculation (i.e. as prescribed in HEA 1001-2007)...but then county official would have discretion over how these $ are allocated to property owners within the county. This would allow local officials to tailor the relief to their circumstances.
Example: A county could choose to use these $ to effectively cap homeowner property taxes at 2% if AV for Pay 2007 (instead of waiting for this circuit breaker to kick in for Pay2008).
•Freeze Child Welfare Levies – Each county’s 2007 child services levies would be frozen at their inflated-adjusted average child services costs incurred from 2002 – 2006. Using this avg. cost methodology will smooth peaks, valleys, and levy abnormalities to provide a more fair level at which to freeze each county’s levy.
State would pay for any amount the 2007 child services operating levies (excluding amounts for repayment of past borrowing), and would be reimbursed by the counties for the amount that exceeds the frozen levy level. Going forward, State would fund all growth in child services costs, except for costs in excess of the DCS recommended treatment plan for a child where local juvenile judge is unable to convince the DCS that the more expensive treatment plan is necessary.
NOTE: There a four (4) child services levies that could be frozen: 1) Family & Children Fund; 2) Residential Psychiatric Treatment Services Fund; 3) Children w/ Special Health Needs Fund; and 4) Medical Assistance to Wards Fund.
•Additional Property Tax Credit on Residential Property – The State would fund an additional property tax credit on all residential property in the total amount of $100 million. The credit would be funded from the larger than expected General Fund balance.
Note: Revenues received in Fiscal Year 2007 exceeded forecast by $290 million. This should provide a 4%-6% reduction to residential property tax bills.
