On Thursday, the Indiana House approved Governor Daniel's property tax cap plan by a vote of 93-1. The plan now moves on to the Republic-controlled Senate. Key components of House Bill 1001 include:
1) Tax bills will be capped at 1 percent of assessed valuation for homeowners, 2 percent for landlords and 3 percent for businesses. These tax caps would begin in 2009.
2) School and welfare costs will be shifted from property taxes to the state. The state will increase sales tax by a penny from 6 cents to 7 cents to pay for these swaps.
3) Voter referendums will be required on local construction projects; school classroom buildings will be exempt. Non-educational projects such as swimming pools and athletic facilities will
still require a referendum. Democrats tacked on this amendment exempting school classroom buildings on Tuesday night.
4) Annual local government spending will be limited to the average growth in county personal income--2.9 percent in Lake County and 4.6 percent in Porter County.
5) Township assessors will be eliminated. All tax assessments will now become the responsbility of the county assessors.
6) Property taxes will be frozen for those seniors whose homes are worth $200,000 or less and have an annual income below $35,000 for singles or $50,000 for couples.
7) State income tax deduction for renters will be increased from $2,500 to $5,000.
8) Earned income tax credits will increase from 6 percent to 9 percent.
House Minority Leader, Brian Bosma, R-Indianapolis, did express concern over the amendment exempting school classroom buildings. School construction debt in Indiana accounts for a higher portion of school tax dollars than the national average.
Despite dozens of amendments being attached to this bill and a marathon floor session in the House on Tuesday night, the key components of Governor Daniels' tax plan remained intact.
House Bill 1001 will now go on to the Senate for approval.