Lawmakers say governor's property tax plan would increase overall taxes

by Samuel King (king@wsbt.com)

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Senate Democrats propose alternative to governor's property tax reform plan

Indiana State Senator John Broden (D-South Bend) and other Senate Democrats say the governor's property tax reform plan would actually cost taxpayers more. They've proposed an alternative plan. (WSBT photo)

By Beth Boehne

Story Created: Feb 25, 2008 at 6:20 PM EST

Story Updated: Feb 25, 2008 at 9:25 PM EST

INDIANAPOLIS — Some Indiana lawmakers say the governor's property tax reform plan would actually cost taxpayers more. They proposed changes they say are fairer to lower- and middle-income people, but the State Senate voted them down.

Senate Democrats say lower- and middle- income people in the state would see property tax relief from the governor’s plan, but that relief would be offset by higher income and sales taxes.

The Democrats presented analysis from an independent firm that showed an average taxpayer in South Bend would pay $600 more a year in overall taxes.

Their plan would tie relief to both a home's assessed value and a person's income.

They say their plan would pay for itself, unlike the governor's plan, which would create a state budget deficit next year.

Senate Tax and Fiscal Policy Committee Chairman Luke Kenley says the plan moves in the right direction, but it's flawed. He says it doesn't help second homeowners, landlords or businesses.

Most Senators agreed, voting down the Democrats' plan along party lines.

Senate Republicans and the Statehouse have also proposed changes to the governor's plan.

State Senator John Broden (D-South Bend) says despite the differences, state lawmakers remain committed to property tax reform.

“I think what you're seeing is what typically happens in a legislative session — the governor proposes and then it's up to the legislature to make modifications and changes,” he told WSBT News.

The Senate version of the tax plan won’t be the final word, because the conference committees made up of House and Senate lawmakers will have to meet to decide what the final version of the property tax reform bill will look like.

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