Leaders in the Republican-controlled Senate and Democrat-controlled House have struck a deal on major property-tax reform legislation, including constitutional caps on the taxes for most homeowners and others.
A vote by both chambers is expected on Friday, if not sooner.
Top lawmakers in each chamber are today selling the proposal to their rank-and-file members. The legislature has until midnight Friday to pass House Bill 1001, the measure that includes the property-tax proposal.
All members of the House and Senate were meeting behind closed doors today to learn details of the agreement.
House Speaker B. Patrick Bauer, D-South Bend, however, did discuss a few elements of the plan before meeting with fellow Democrats. The proposal includes the framework of Gov. Mitch Daniels' property-tax plan, capping homeowners' tax bills at 1percent of assessed value, 2 percent for rental properties and farmland and 3 percent for businesses.
The agreement also would include placing those caps in the state's constitution, a concept Democrats have resisted. When asked this morning whether such a constitutional amendment would be part of the final deal, Bauer responded: "Probably."
There would, however, be exceptions.
House Minority Leader Brian Bosma said that under the agreement, the caps would not be applied to Lake and St. Joseph counties, two areas of the state that would have been hit the hardest under the caps. Bosma declined to detail what kind of standard those two counties would be held to.
"The speaker has been very insistent that those counties be treated in a different fashion," Bosma said. "That certainly would not be my choice."
Bosma did say, however, that Marion and all the rest of the state's remaining 90 counties would be held to the caps under Daniels' proposal.
The agreement also includes referendums on building projects. Bauer, however, said referendums only would be required for projects of a certain size. He did not detail what threshold would be required for a referendum.
"Up to a certain size, you can go ahead and build, but if it's up higher you have to do a referendum," Bauer said. "So we tried to keep really big projects under a referendum but the moderate ones not. The very, very big projects would have referendums."
Democrats had pushed to have all classroom and lab projects excluded from referendums while Republicans pushed for referendums on all building projects.
The agreement also would keep a Senate provision that would eliminate township assessors in townships with fewer than 15,000 parcels. In more populated townships, a referendum would determine whether to keep or eliminate township trustees.
Under the deal, local units of government that could not make ends meet due to revenue lost by the plan's property tax caps could appeal to a Distressed Unit Appeal Board, which would have the power to temporarily lift caps or take other steps to help a city, town or school district adjust to the property-tax caps.
The agreement also includes $50 million in 2009 and $70 million in 2010 to assist schools districts that would lose revenue under the caps.
"Those who need to govern can continue to govern. Those who need to educate can continue to educate," Bauer said of the deal. "I think we have a fairly good balance."
Lawmakers declined to discuss many of the additional details of the agreement, citing the need to discuss the matter with fellow lawmakers first.
"I'm encouraged that there is an agreement. Am I thrilled with the content of the agreement? No, I'm not," Bosma said. "It meets much of the framework the governor proposed in October and that the Republicans endorsed as well. It's absolutely better than nothing."
House Ways and Means Chairman Bill Crawford, D-Indianapolis, called the agreement "tolerable."
Crawford said he remains "extremely concerned" that the levies that are being moved off property taxpayers and to the state will prove too expensive for the state to maintain in an economic downturn. State revenues have fallen nearly $90 million behind expectations in recent months."
It's going to make budget-making next year extremely difficult," he predicted.
Among the levies that Republicans have wanted to be picked up are school general funds, child welfare, juvenile incarceration, school pension bond debt and the pre-1977 police and fire pensions.
Lawmakers did not detail this morning which levies the state would assume under the latest agreement, which Rep. P. Eric Turner, R-Marion, called a "great compromise."
A conference committee report reflecting the agreement is being drafted at the Statehouse. The next step would be for the conference committee considering HB 1001 to approve the deal. Then, HB 1001 would move before the House and Senate for final votes.
"If I had my druthers, I would do it tonight," Bauer said of a final vote. "We probably can't do it today. It takes a while to have this processed. I would hope we would be able to do it tonight, but it probably will be tomorrow."
Regardless of when a final vote is taken, Bauer said it's clear leadership in the Senate and House are on the same page. The remaining task is to convince their members to agree.
"We have an agreement, period," Bauer said. "It's basically compromise all the way through."
From the Indy Star
Thursday, March 13, 2008
