REFORM CALLED VICTORY FOR HOOSIER TAXPAYERS
Today is an historic day for Indiana. At 1:00 p.m. this afternoon in the Statehouse rotunda, Governor Daniels, House Speaker Pat Bauer, Senate President Pro Tempore David Long and I signed HB 1001, the property tax relief bill, into law.
You will find details of the plan below. This plan will usher in a new era of taxpayer protection in Indiana thanks to some great cooperation and compromise in the Statehouse.
Taxpayers will no longer be asked to open their pocketbooks to pay for government's overspending. Instead, government will have to operate within its budget and learn to maximize every taxpayer dollar.
I am proud to have the opportunity to stand among the Hoosier lawmakers who worked with us to pass meaningful property tax relief. We will be kicking off a new era in Indiana-one that puts Hoosier homeowners first.
LT. GOVERNOR BECKY SKILLMAN
Wednesday, March 19, 2008
Key elements of HEA 1001
The plan adopted by the General Assembly meets all four of the key elements laid out by Governor Daniels as essential to providing meaningful and lasting property tax reform in Indiana.
Immediate Relief
**Homeowners will see an average tax cut of more than 30 percent in 2008 vs. 2007 bills
**2008 homeowner relief increased by $620 million - the total expected collection from the
sales tax increase - bring the 2008 total homeowner relief to $870 million
Permanent Protection
**The plan caps homeowner property taxes at 1 percent of a home's assessed value starting in2010. (In 2009, the cap will be 1.5 percent)
**The plan caps property taxes for apartments and agricultural land at 2 percent of assessed value in 2010 (In 2009, the caps will be 2.5 percent)
**The plan caps business property taxes at 3 percent of assessed value in 2010 (In 2009, the cap will be 3.5 percent)
**When caps are fully in place, the plan delivers $1.72 in tax cuts for each $1 of new sales tax.
**This plan takes the first step toward placing the caps in the Indiana Constitution. Taxpayers will get a chance to approve the caps in the November, 2010 general election only if lawmakers approve them again next year.
**The plan caps homeowner property taxes at 1 percent of a home's assessed value starting in 2010. In 2009, the cap will be 1.5 percent.
**State takes over about $3 billion of costs that were previously on local property tax rolls:
**The remaining 15 percent of school operating costs
**Child welfare levies
**Costs of juvenile incarceration in state facilities
**State fair and forestry levies
**Health care for the indigent
**Pre-school special education levies
**Costs of police and fire pensions pre-1977
Limits on Local Government Spending
**Referenda required for new school and local government capital projects.
**For elementary and middle school projects over $10 million
**For high school projects over $20 million
**For local government projects over $12 million or 1 percent of assessed value
**Eliminates loopholes on levy appeals that previously enabled local governments to
spend more than budgeted
**County Council oversight of non-elected board budgets
Improved Accuracy and Fairness in Assessment of Property Value
**Reduces the total number of assessors from 1,100 to 92 county assessors and 42 township assessors, an 88 percent reduction.
**Requires referendums this November in townships with more than 15,000 parcels to determine if township assessor duties should be transferred to the county
**Increased requirements for assessor certification that will mean more equity, uniformity and fairness
**A process in place to remove an assessor who does not meet performance expectations.
**Stronger state oversight with the Department of Local Government Finance required to be party to any vendor contract
Other Elements of HEA 1001
**Provides transition period to ease the impact of the property tax caps on local government
**Provides special accommodations for Lake and St. Joseph counties, due to their high property tax rates and heavy reliance on property taxes to fund local government services
**Provides $120 million for schools in 2009 and 2010 to reduce the impact of the tax caps
**Increases school "rainy day" fund to ensure adequate funding is available in the event of an economic downturn
**Limits property tax bill increases to no more than 2 percent annually for seniors who make less than $30,000 annually (single) or less than $40,000 (joint), if the assessed value of their homes is $160,000 or less.
**Increases renters deduction from $2,500 to $3,000.
**Increases earned income tax credit for lower-income Hoosiers from 6 percent to 9 percent.