Story Created:
Nov 13, 2007 at 4:41 PM EST
Story Updated:
Nov 13, 2007 at 6:22 PM EST
INDIANAPOLIS (AP) — A state legislative commission that spent months studying Indiana tax woes wants to see a deeper property tax cut than one pitched earlier this fall by Gov. Mitch Daniels.
The commission released a report Tuesday that calls for at least a 50 percent property tax cut for most homeowners and a 25 percent cut for other residential property like apartments and second homes.
Daniels has proposed a plan to reduce homeowner tax bills by about a third statewide. But members of the bipartisan commission say their report isn't meant to compete with the governor's plan. They see it as a map they hope leads to tax reform during the upcoming legislative session.
"Our No. 1 goal is to provide for major and permanent property tax relief," said state Rep. Peggy Welch, D-Bloomington.
The upcoming session is expected to be dominated by the issue of property taxes because although taxes on homeowners were projected to increase by 24 percent on average statewide this year, many taxpayers have faced even higher bills.
The committee's report parallels several elements of the Daniels proposal. Both favor property tax caps, a reduction in the number of assessors statewide and the use of sales taxes to provide more revenue.
The similarities pleased the governor, who issued a written statement congratulating the commission on "an excellent report."
The commission's report centered on four main recommendations: provide permanent property tax relief, reduce local spending growth and close tax loopholes, clarify the property assessment system, and offer alternative revenues to help reduce property taxes.
It also included a host of other proposed changes. Committee members want the state to assume the cost for local levies that cover things like child welfare and the state fair.
They also think the state can balance their proposed property tax cuts with increases in local income option taxes and by using a broader base for sales taxes.
"We think a 50 percent reduction is an appropriate level to shoot for," said State Sen. Luke Kenley, R-Noblesville, who led the commission and also serves as chairman of the Senate Tax Committee.
The committee recommends consolidating assessing to one elected official per county with an adequate staff, to help make the assessment system more transparent.
"There's a yearning for certainty in this process and understanding," said another committee member, Sen. John Broden, D-South Bend.
The committee was made of a mix of politicians and tax experts who work outside state government. Other members included House Ways and Means Chairman William Crawford, D-Indianapolis; and Senate Appropriations Chairman Robert Meeks, R-LaGrange.
It heard more than 35 hours of public testimony and based its recommendations on that feedback, Welch said.
State legislators plan to introduce several bills in the upcoming session based on Daniels' property tax relief proposal. Welch said Tuesday after her commission unveiled its recommendations that Daniels' plan will lead the way, but their ideas also will play a role.
"He knows we're going to amend the heck out of it," the Democrat said with a laugh. "But that's OK, that's the legislative process."