Lawmakers optimistic after Gov. Daniels' testimony on property tax reform

by Troy Kehoe (tkehoe@wsbt.com)

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Governor Mitch Daniels testified about property tax relief to the Indiana House Ways and Means Committee

Governor Mitch Daniels made his case for property tax relief in testimony to the Indiana House Ways and Means Committee on Wednesday, Jan. 16, 2008. (WSBT photo)

By Beth Boehne

INDIANAPOLIS — Governor Mitch Daniels says it's a plan that will bring relief to the thousands of Indiana homeowners. He brought his case for property tax relief to the Statehouse Wednesday, and lawmakers questioned the governor for nearly two hours.

Now, some lawmakers are voicing renewed optimism that parts of it just might work.

Gov. Daniels has never testified before a House committee before, and he said this may be the only time he ever will.

In fact, only a handful of governors have ever testified at the Statehouse. But Gov. Daniels said the prospect of property tax relief is too important, so he sat down Wednesday morning to ask lawmakers for help to make it happen.

The introduction was short.

"I appreciate the opportunity to be here,” Gov. Daniels said. “I'm excited and I hope you are."

The reason was simple.

"We have it in our hands to deliver real and profound relief,” Gov. Daniels said.

And Gov. Daniels didn't waste any time delving into his plan of how to achieve it — cutting and capping property taxes at 1 percent for homeowners, 2 percent for rentals, and 3 percent for businesses; making those caps permanent; and replacing the lost revenue through a 1 percent sales tax hike.

It wasn't long before the questions started flying … and then "polite" accusations and suggestions: Why not raise state income tax instead? What about eliminating property taxes altogether? Why referendums for new capital construction projects? Can schools survive off the property tax rolls?

Gov. Daniels calmly answered each one.

But two local mayors who testified afterward told the committee there was one important subject left out.

"We do feel like the solution is disproportionately falling on cities and towns,” said Mayor Allan Kauffman, D-Goshen.

The governor says the key to the plan's success is controlling local spending. But some said it’s already controlled.

“We are living within our means, and we'll continue to do that,” said Mayor Jeff Rea, R-Mishawaka.

Still, as the hearing wrapped up, there was an air of optimism, for one simple reason:

"Republican Democrat alike, governor or legislative, we all have the same goal in mind,” said Rep. Kreg Battles, D-Vincennes, who is a member of the Ways & Means Committee.

The key now is reaching it together by March 14, so relief can be printed this spring.

"We have to act right now,” Gov. Daniels said.

March 14 is the deadline for final action, but both House and Senate lawmakers are still pushing to have their versions of the relief plan ready for debate by the end of this month.

It is not any clearer what those plans might look like. But as Gov. Daniels wrapped up his comments Wednesday, he did say one thing is clear — whatever emerges will be 100 percent satisfactory to no one, but he's confident it will help a lot of Hoosiers.

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