13 WTHRHouse panel takes up property tax caps

House panel takes up property tax caps

Kevin Rader/Eyewitness News

Indianapolis - The push to make property tax caps part of the state constitution got another hearing today at the statehouse. If lawmakers approve the measure, it would be eligible for a statewide referendum in November.

When originally proposed, the property tax caps were seen as an answer to rising property taxes in Indiana. State lawmakers reacted quickly, adopting a state law with a guarantee that no homeowners property taxes would go up over one percent a year, or two percent for rental property and three percent for business.

But that was only the first step. Lawmakers knew a law with unequal taxation would face a stiff legal challenge if they didn't put it in the state constitution.

"It is really important we, the taxpayers have some sort of degree of financial control over what I believe is excessive spending at the local level," said Columbus homeowner Kristen Brown.

Monday, the House Ways and Means Committee conducted a hearing on the property tax caps, which are still being phased in.

"Our constitution should only be changed after proper analysis and debate. The one, two, three percent have not even gone into effect, therefore we have not even debated the consequences, because we haven't seen the impact," said Kokomo Mayor Greg Goodnight.

All last session, opponents argued the state did not have enough time or information to act on adopting constitutional caps. Now, with a new session comes the same argument.

"To do this too quickly, without giving local units of government, municipalities, cities and towns alternative revenue sources, will have a terrible impact on our cities and towns across Indiana. The fact is, I think, I don't know," said Tom Hannity, Indiana Firefighters. "We need some breathing time to see the full impact of this."

To others, waiting even longer will push back the state's economic recovery.

"If you go back to that time period when the property tax crisis happened, Indiana was one of the leaders in the nation as far as foreclosures," said Paul Wyman, president of Indiana Realtors. "I will not sit here today and tell you the property tax crisis did not create the foreclosure problem in Indiana, but it certainly exasperated it."

From the Associated Press:

An Indiana House committee has taken up legislation that ultimately could lead to limits on property tax bills being amended into the state constitution.

The Ways and Means Committee did not take a vote on the measure Monday but plans to do so next week. A Senate committee plans to vote on the measure Tuesday.

If approved by the Legislature this session, voters would decide in November whether to place the limits in the constitution. The phased in-caps already are in state law, but putting them in the constitution would make it difficult for future legislatures to undo. They would limit homeowners' property tax bills to 1 percent of their homes' assessed value, with 2 percent caps on rental property and 3 percent on business property.

(Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)