13 WTHR - Indianapolis News |Lawmakers start early on unemployment, property taxes

Lawmakers start early on unemployment, property taxes

Kevin Rader/Eyewitness News

Indianapolis - Indiana still owes the federal government more than a billion dollars for handling unemployment benefits. How will the state deal with the debt and at the same time reduce your property taxes?

Unemployment and property taxes are two of the biggest issues confronting this state and its lawmakers. Currently Indiana owes $1.3 billion to the federal government for money borrowed to pay unemployment. That is expected to increase to $1.7 billion by the end of this year.

If the state enacts the tax increase passed last session to sustain the unemployment trust fund, it could start paying back that money in 2014. If it's delayed one year as now proposed, that would be pushed back to 2015 and the state would not be able to pay back its debt until sometime between 2022 and 2025.

"This is a 500-year flood level. No...insurance system is meant to deal with ten and a half-, eleven-percent unemployment over three or four years," argued Pat Kiley, Indiana Manufacturers Association.

By delaying it, the state would save Indiana business an estimated $270 million.

"If that money goes in to me it's just going down a rat hole. It will cause increased unemployment," said George Raymond, Indiana Chamber.

The Senate Tax and Fiscal Policy Committee also heard debate about the proposed constitutional property tax caps guaranteeing homeowners property taxes could not go up over one percent a year, two percent for renters and three percent for business.

"I have heard on several occassions that the rush to do this, to make this constitutional is because what we are doing now is unconstitutional," said Sen. Tim Skinner (D-Terre Haute).

"No, I don't think it is because the constitutional amendment is in the process of being adopted," said Sen. Luke Kenley (R-Noblesville).

But not everyone is happy about that. The Association of Indiana Counties, the Indiana Association of Cities and Towns and IPS all lobbied against the caps.

"They are not very enthused about this system because now if they want to raise taxes they have to justify that to their consumer," said Kenley.

The Senate committee will hold another public hearing December 8th in hopes of actually hearing about these issues from the general public. The House will begin hearings December 7th.