Tag Archives: property tax caps

Bauer, Bosma, Long and Simpson Set the Stage

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The 2010 legislative session might officially begin Tuesday with Organization Day. The discussion started today, however, at the Indiana Chamber’s Central Indiana Legislative Preview. The four caucus leaders had plenty to say during an hour-plus dialogue. Just a few of the highlights:

  • Plenty of debate and disagreement over the property tax caps. House Speaker Pat Bauer (D-South Bend) tried to insert some ABCs into the 1-2-3 argument, with his main point being that assessment problems still need to be fixed. Senate President Pro Tem David Long (R-Fort Wayne) warned of constitutional challenges (lawsuits) if the caps are not passed. Senate Minority Leader Vi Simpson (D-Bloomington) offered that "we really don’t know if 1-2-3 are the right numbers" and said there should be no exemptions for any counties
  • State budget: House Minority Leader Brian Bosma (R-Indianapolis) says there are two priorities for his caucus — no new taxes and no additional spending. Long: "Any bill that has spending in it is more than likely dead on arrival."
  • Party lines were clearly at play on federal health care reform, with Long "scared to death about what they’re talking about in Washington," while Simpson is "all for a national health insurance plan that insures more people." Bauer arrived in time to add that a fortune could be made and debt problems resolved if a 25% premium charge was placed on every advertisement both for and against health care reform
  • Local government reform: Simpson says exemptions for certain counties or areas have no place in such legislation; Long sees much duplication in township services in urban areas, but not necessarily in rural places; and Bauer gave arguments on both sides of the question before asserting that reform "must take place in steps and some steps will be taken this session."
  • Support of delay in unemployment insurance tax increase on employers: Bosma said "yes" to delay or even permanently postpone; Bauer adds that modifying those increases should take place in conjunction with a jobs program; and Simpson notes her caucus will "undoubtedly support a delay" but also believes that reforms in the hearings and appeals processes should be part of the equation
  • Education reform was addressed with Long contending that while some say Superintendent of Public Instruction Tony Bennett is a bull in a china shop, "I say we need a bull in a china shop. He needs to continue to push the envelope." Simpson says Democrats are more open to these discussions due to the efforts of President Obama. Bauer wants the focus more on students, expecially those struggling in inner cities, than teachers. Bosma sees the coming decade as one of "examination and action" on education, but that will not be the case in the 2010 General Assembly session

Bottom line: Excellent discussion; there will be plenty of issues in play during the short two-month session; and no one really knows what the outcomes will be.

Differential Property Tax Caps and the Indiana Constitution (Why We’re Still Opposed)

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Late last summer, the Indiana Chamber tax policy committee revisited the issue that is currently being debated again by the newly elected General Assembly. Should the 1%-2%-3% (of assessed value) tax caps be enshrined in our Indiana Constitution? Based on a policy position that has been in place for many years, the Chamber opposed SJR 1 last year, and the committee concluded that there is no reason to change that well-founded position.

So, what’s so bad about tax caps? Nothing if they were the same for all taxpayers. But the fundamental problem here is that the caps are different for different taxpayers. The resolution to change our Constitution (SJR 1) proposes replacing the language that says that all taxpayers will be guaranteed assessments and tax bills that are “uniform and equal” with language that says properties with equal market values will be taxed differently based on how the property is used. The 1%-2%-3% caps establish a “classified” property tax system. This is what our longstanding position opposes. A review of other states’ property tax structures reveals that classified systems serve as a means to tax business property at a higher rate, and therefore higher burden, than other property types.

This is the root of our opposition.

We believe that the founding fathers of our state got it right when they worded our Constitution to say that property of equal value will be assessed and taxed the same regardless of how the owner chooses to use it. In the simplest terms, what the proposed constitutional amendment would do is to sanction, endorse and make permanent a system that says owners of business commercial and industrial real property, and business personal property (machinery and equipment) can and will be taxed up to three times greater – merely because it is used for business purposes – than what some other property owners will be taxed on equally valued property. Is this something the Legislature and the citizenry should be supporting? Is this the message we want to send in difficult economic times to those considering whether to expand their operations in Indiana? Continue reading →