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INDIANAPOLIS – The Indiana Farm Bureau offered a proposal Monday that it believes could result in permanent, substantial property tax relief for all Hoosiers.
One of the key attributes of the plan is that it treats all property taxpayers the same, from businesses to farmers to landlords to homeowners. Legislators often focus on just homeowners.
“This program gives relief to everyone,” said Don Villwock, president of the Farm Bureau.
But not everyone would pay the taxes that would bring in the replacement revenue.
The Indiana Farm Bureau proposal calls for $2.1 billion in property tax relief to be paid for by increasing the state sales tax from 6 percent to 7 percent and the individual income tax from 3.4 percent to 4.4 percent.
The sales tax increase would bring in about $880 million, and the income tax hike would bring in about $1.225 billion.
Villwock said Indiana’s corporate income tax is already too high and increasing it would not be responsible if the state wants to remain competitive.
The money raised would go to eliminate certain property tax levies. This includes $800 million needed for the state to take over the remaining portion of the school general fund; $205 million needed to cover school utility and insurance expenses that districts have moved to the capital projects fund levy; $350 million for the state to take over all remaining welfare levies; $350 million to take over the administrative cost of supporting local courts; and $400 million to create a new school rainy-day fund for times of recession.
Villwock said this massive tax swap would mean an average 30 percent reduction in property taxes statewide.
Indiana Farm Bureau members have been lobbying for years for the elimination of property taxes but recently have shifted their position to immediate permanent and substantial measures to free Hoosiers from the burden of property tax.
“The Farm Bureau and our members are tired of the Band Aid approach,” he said.
The bureau does not yet have a sponsor for the plan for the 2008 legislative session, which promises to be a hot-bed of property tax talk. They are visiting with Gov. Mitch Daniels’ administration, legislative leaders, various tax commissions and business leaders to gain support.
Villwock also said that farmland acreage will see its assessed value jump next year from $880 an acre to $1,140 an acre – a 29 percent increase. But the number has been arbitrarily held the same since 1999.
nkelly@jg.net
