Tax Caps to the Constitution in Indiana

All eyes are on Bauer for tax reform this year! Will Bauer use the normal stonewall techniques and kill the amendment to cap taxes to the Indiana Constitution?

Hoosier tax payers revolted several year ago with Tea Parties before Tea Parties were cool. However, if the caps are not added to the constitution then we can say, "so long" to the lower property taxes and you bet your last dollar that we will continue with a higher sales tax as well...

A good article follows from the Evansville Courier
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Leery Dems move forward on tax caps
* By Eric Bradner
* Posted December 7, 2009 at 1:11 p.m. , updated December 7, 2009 at 1:11 p.m.


Evansville Courier & Press

INDIANAPOLIS — Though Democrats who control the Indiana House are nervous about the effects that constitutional property tax caps would have on local governments, they will nonetheless charge toward an early 2010 vote that could give Hoosiers the final say.

As the House Ways and Means Committee considered the amendment Monday, firefighters warned that the quality of public safety could diminish if the funds aren’t available to pay for it, and businesses said it’s not fair that they must pay a higher rate than homeowners.

Tony Wolfe, the president of the Gibson County Council, said the caps deal a major blow to his county’s finances. He was one of several local government officials who warned they might have to raise taxes elsewhere to make up the difference.

“The unintended consequences of some of the things that pass up here filter down pretty hard on counties,” he said.

Homeowners, though, told lawmakers they worry the tax caps could eventually be lifted if they aren’t written into the constitution.

“We are not promised a fiscally responsible governor. We are not promised a fiscally responsible Legislature,” said 23-year-old Indianapolis resident Wesley Robinson.

“It’s only right that taxpayers have some form of control over local government spending,” said Kristen Brown, 45, of Columbus.

State lawmakers in 2008 voted to phase in property tax caps of 1 percent for homes, 2 percent for farms and rental property and 3 percent for businesses. According to estimates by the Legislative Services Agency, the General Assembly’s non-partisan research arm, those caps would save property taxpayers – and cost local governments – $465 million in 2010 and $488 million in 2011.

Lawmakers also voted in 2008 to amend those caps into Indiana’s constitution. To complete that process, the amendment needs to be passed by both the House and the Senate this year and approved by voters in a November 2010 statewide referendum.

Kent Morgan, 64, a retired Indianapolis resident, said he watches schools build massive new sports complexes and professional sports teams build new arenas on the backs of taxpayers.

“All I ask – please keep your promise. Please keep your word,” he said.

The fiscal panel did not vote on the caps Monday, but its chairman, Rep. Bill Crawford, D-Indianapolis, said members will vote next week on House Joint Resolution 1, the constitutional amendment.

If it wins the panel’s approval, the amendment moves to the full House, which Democrats control 52-48, for the legislative session that begins Jan. 5. There, Speaker B. Patrick Bauer, D-South Bend, has signaled he will give it a vote.

Meanwhile, the Senate Tax and Fiscal Policy Committee plans to vote on the amendment Tuesday. It is expected to easily win passage both in that panel and in the full Senate after the session begins, since Republicans control that chamber by a 33-17 margin.

Democrats have long argued that while property tax caps might save homeowners money, the steps the state has taken to make up for that loss, such as raising the sales tax from 6 to 7 percent, simply shift the burden.

They point out that allowing local governments to increase other taxes could amount to a tax shift, not a reduction.

“That’s the alternative to property taxes,” said Rep. Dennis Avery, D-Evansville.

Avery quizzed one homeowner who was testifying in support of the caps over whether that homeowner grasped the full meaning of their implementation.

“You’re expecting to see your taxes go down, but you’re not expecting to see a decline in public safety,” Avery said. “How is that possible?”

Democrats such as Bauer have argued that if tax caps are to be written into Indiana’s constitution, they must be coupled with legislation preventing property assessments from rising wildly from year to year.

House Bill 1004, which would cap the amounts assessments could increase, was scheduled to be considered Monday as well. However, due to snow, that bill’s author, Democratic Rep. Dale Grubb of Covington, could not attend. Instead, lawmakers will discuss it Wednesday.