Deal reached on property tax relief; some caps won't apply in St. Joseph County

by Samuel King (king@wsbt.com)

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Indiana lawmakers will vote on a property tax relief and restructuring plan before the session ends

Indiana lawmakers will vote on a property tax relief and restructuring plan before the session ends at midnight on Friday March 14, 2008. (WSBT photo)

By Beth Boehne

Story Created: Mar 13, 2008 at 5:28 PM EST

Story Updated: Mar 13, 2008 at 10:54 PM EST

INDIANAPOLIS — The deal is almost done! Indiana lawmakers are set to vote on property tax reform.

After more than two months of negotiation, leaders in the state House and Senate have reached an agreement on property tax reform.

It would cut property taxes by an average of 29 percent statewide, but the plan could mean less savings for homeowners in St. Joseph County.

"We have two parties in Indiana and they have the governor and the Senate, so we have to compromise," said House Speaker Pat Bauer.

The plan would cap taxes at 1 percent of a home's assessed value for residential property, 2 percent for rental property and farmland and 3 percent for commercial property.

The catch for property owners in St. Joseph and Lake counties, is the cap on the taxes that pay for government debt service on things like school construction would be eliminated.

That means taxpayers in those counties could see somewhat less savings than homeowners in other counties.

Bauer said that was absolutely necessary because those counties have so much debt and would have lost too much revenue under the tax plan.

"You can call it whatever you want, but it meant that they would be able to pay their bill and not declare bankruptcy," Bauer said. "The state of Indiana should not force local governments to declare bankruptcy."

Republicans had reservations about that provision and other parts of the bill as well.

"I'm not 100 percent satisfied with it, because I don't personally like the phase in aspect. But that's what we're potentially going to get with the permanent caps going into effect in 2010," said Rep. Tim Neese of Elkhart.

But Bauer says with the state taking on responsibility for welfare, juvenile justice and some school costs, everyone will see real tax savings.

"There's a lot of different ways that we're cutting all property taxes. So some people might be blinded by some other adjustments and they're losing focus of the tremendous cuts there are in this bill," Bauer said.

The House adjourned for the night just before 11 on Thursday. That means any final vote on the property tax plan will happen Friday. Stay with WSBT News on air and online for continuing property tax reform coverage.

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