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INDIANAPOLIS – If a panel discussion Monday with the four legislative caucus leaders is any indication, the battle over putting property tax caps into the Indiana Constitution will dominate the 2010 legislative session.
The lawmakers met at the annual Indiana Chamber of Commerce luncheon as a prelude to the 2010 session, which technically kicks off today with Organization Day.
In election years, Organization Day is used to swear in new members, make committee assignments and complete other administrative tasks. But this year it’s largely just a jovial meeting of the 150 members before they get down to business for real Jan. 5.
“It’s about niceties,” said Senate Minority Leader Vi Simpson, D-Bloomington.
She and the other three caucus leaders were peppered with questions on a variety of topics at the Chamber event, but the most interesting discussion was about tax caps.
Legislators have put property tax caps in the law that limit a property tax bill from exceeding 1 percent of the assessed value for homesteads; 2 percent for agriculture and rental properties; and 3 percent for businesses. This means less money is available to local units of government for services.
But many lawmakers and Gov. Mitch Daniels want to go further by placing the caps into the state constitution. The constitutional amendment has already passed the legislature once and must pass again this year for the question to be submitted to the public on the November 2010 ballot.
If the amendment is not passed again this year, the process must start over again, pushing it back at least four years.
Senate President Pro Tem David Long, R-Fort Wayne, and House Minority Leader Brian Bosma, R-Indianapolis, lined up firmly in support of the amendment.
“We will have a vote – quickly,” said Long, who thinks if the legislature doesn’t act this year it opens the state up for a constitutional challenge based on the fact that the property taxes are not being applied in a “uniform and equal manner.”
He also noted that local governments are refusing to make difficult long-term decisions about efficiency and consolidation in hopes that the legislature will back-track.
But House Speaker Pat Bauer, D-South Bend, wouldn’t commit to bringing the constitutional amendment up for a vote. He blocked the vote last year, saying legislators didn’t have enough information on how local communities would be affected by the caps.
He said Monday that Hoosiers are still seeing large property tax increases and that lawmakers still have work to do.
He is especially concerned about how homes are valued for assessment purposes and how that assessment works with the caps.
“I just don’t know if we got this right,” Bauer said, noting it did not bring the relief he and others thought it would.
Long promised to help work on the assessment issue but said that shouldn’t stop a vote on caps now.
Simpson said she would vote against putting anything in the Constitution that hasn’t been fully implemented yet. The caps were phased in and are set to be in full effect in 2010.
But she acknowledged that if a vote is allowed in the Senate it will pass. And she said she thought Hoosiers would approve of it in a statewide referendum.
“This is not good public policy,” Simpson said. “It is indeed good politics.”
The backdrop of the discussion is the 2010 election. All 100 House seats and 25 Senate seats are up for re-election, and the prevailing party gets control of using new census data to redraw legislative boundaries that will be in place for the next decade.
A few groups are against the constitutional caps, including the Indiana Chamber of Commerce and the Indiana Farm Bureau. The Farm Bureau ran an ad in the Indianapolis Star on Monday welcoming legislators back. It said: “In these uncertain times, exercise restraint. Please don’t raise our taxes. Don’t kill our jobs. Don’t amend our constitution.”
