Ind. House advances property tax cap legislation without changes

Ind. House advances property tax cap legislation

INDIANAPOLIS — The Indiana House rejected proposed changes Thursday to legislation aimed at adding caps on property tax bills to the state constitution, a measure supporters say will give people more certainty about how much they will be paying.

A final vote on the legislation is expected Monday. If the House and Senate pass the same resolution this session, voters would decide in November whether to put the tax limits into the constitution.

State law already limits property tax bills on homeowners to 1 percent of their homes’ assessed value, with 2 percent caps on rental property and 3 percent limits on business property. But adding the limits to the constitution would make it harder for future legislatures to undo them.

Three Democrats proposed changes to the measure, but one amendment was withdrawn and two were voted down. Republicans said Democrats who offered the amendments were trying to kill the resolution, and thus derail a three-year effort to put the issue before voters.

“This is a huge victory for the taxpayers of Indiana, one we have worked on for years,” said House Minority Leader Brian Bosma, R-Indianapolis. “Without any amendments being adopted today, I think this guarantees that the constitutional amendment will be adopted in very quick fashion. A major amendment today would have really changed the prospect of this passing into law.”

The reason the wording matters so much is that to amend the constitution, a resolution must pass two consecutively elected legislatures and then be approved in a statewide vote. The Legislature approved the resolution in 2008, and now seems likely to do so again this session.

Bosma said case law says the consecutive resolutions have to be worded the same, or virtually so. Some Democrats, including House Speaker Patrick Bauer of South Bend, said he believes that constitutional resolutions that are worded somewhat differently can still pass twice and be eligible for a statewide vote.

The property tax caps are expected to save taxpayers about $450 million this year. Some lawmakers oppose not only writing the limits into the constitution but the caps themselves. They say the caps mean less money for local governments and schools and will result in layoffs and reduced services.

The resolution exempts local debt from property tax caps in Lake and St. Joseph counties until 2019. That was included in the legislation in 2008 at the insistence of lawmakers who said local governments in those counties would take too big of a financial hit otherwise.

House Ways and Means Chairman William Crawford, D-Indianapolis, offered an amendment Thursday that would have removed the exemption. He said it was an effort to treat all 92 counties the same, instead of allowing two to raise taxes above the limit. It was voted down 68-31.

“Any act to amend is trying to kill this,” said Rep. Jeff Espich, R-Uniondale.

Rep. Craig Fry, D-Mishawaka, proposed provisions to put caps on the growth of assessed values. He said caps on bills would not provide lasting relief to taxpayers.

“They will simply raise the value of your property,” he said. His proposal was voted down 82-15.