Permanent Property Tax Caps Must Pass Now
December 1, 2009 - (RealEstateRama) — During the 2008 legislative session, I voted in favor of House Enrolled Act 1001, which enacted major property tax reform. During the same session, I also voted in favor of Senate Joint Resolution 1, which started the process of placing the property tax caps permanently in our state’s Constitution.
Just last week, on November 17, I joined my Republican colleagues in announcing our legislative agenda. We made passing permanent property tax caps our top priority for the 2010 legislative session.
Amending the constitution is a three step process. The first two steps require the piece of legislation to pass through two separately elected General Assemblies. Only then does the third step take place: the passed legislation goes before the voters of the state in the form of a Constitutional amendment.
SJR 1 has currently passed through elected General Assembly, the 115th, in 2008. If we are successful in passing the same resolution when we return to Indianapolis in January, then the amendment will be placed on the general election ballot in 2010, giving Hoosiers the opportunity to vote-for or against-permanent property tax reform. If we are unsuccessful, then the process starts over again, and Hoosiers will be denied the opportunity to consider the amendment for a least two more years.
HEA 1001 phases in statutory property tax caps over a two year period. Starting with the fiscal year 2009, property taxes were reduced to 1.5 percent of the assessed value for residential property, 2.5 percent for rental property and agriculture and 3.5 percent for business property. In 2010, property taxes will be reduced to 1, 2 and 3 percent, respectively, of assessed value. It is important to note that property taxes are paid a year behind. For example, 2008 assessments are not paid until 2009.
It is important to Hoosiers that the property tax caps are placed into the state constitution in order to avoid changes and/or amendments which could alter the 1, 2, and 3 percent caps. By adding the legislation to the constitution, it will force legislators and voters to use the three step process in order to make any changes to the property tax reform. If legislation is not written in the constitution it will make the process for changes and amendments much easier for the General Assembly which could allow for property tax caps to be altered costing taxpayers extra money on their property tax bill.
There are three important reasons to amend property tax caps into the constitution:
1. Keep Democrats from chipping away at 2008 property tax reform
2. Prevent lawsuits claiming statutory caps are unconstitutional
3. Encourage government efficiencies
Residents all over the state are already seeing positive impacts of the property tax caps, including residents of Allen and Noble Counties. Since 2007, 97.9 percent of Allen County homeowners have seen a decrease in their property tax bills and 94.5 percent of Noble County homeowners have seen a decrease. Whitley Counties report is not yet available, but I believe its result should be similar.
You have my promise to vote in favor of writing the property tax caps in the constitution to ensure Hoosiers never again have to experience excessive property tax bills. It is my goal to give Hoosiers the opportunity to vote in the November 2010 General Election on permanent property tax caps
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INDIANAPOLIS (March 19, 2008) - Governor Mitch Daniels today signed historic legislation that will provide significant property tax relief now and permanent protection against future property tax increases. Sequentially during a ceremony at the Indiana State House, Speaker of the House B. Patrick Bauer, Lieutenant Governor Becky Skillman, Senate President Pro Tempore David Long, and Daniels signed HEA 1001 flanked...
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As a homeowner, I am thoroughly in support of the property tax caps. However, as a mortgage broker I’ve seen the unintended consequences that this can cause. The best example of the problem are in California where the property taxes were re-assessed to current market value when a home sold. Which virtually made it impossible to determine what the new homebuyer would need to pay. When homes did not sell then the government was unable to generate increased tax revenue. We would have the same problem, by setting maximum increases per year, from the floating cap rate if home values go down.
It does require, “…government efficiencies” which is an oxymoron. This requires ACTUAL government efficiencies and forecasting of future tax revenue based on economic events affecting home values.
Maybe shifting more of the property tax burdens to Casino’s or even adding a Deed Transfer tax would be a good alternative.
Do, what it takes to get the caps put into the constitution.