The Indiana House Republicans are taking advantage of their minority status by putting forth a plan on property tax relief. You’ll note that the Senate Republicans have not yet followed suit — a minority faction in a chamber simply has a lot more freedom of movement in this kind of situation; they can’t be blamed when nothing actually happens.
The House Republicans want to keep in place the plan for the State to spend $300 million on property tax relief. That money is expected to come from the sale of slot machine licenses for Indiana’s two horse racing tracks. In addition, the House Republicans propose spending an additional $200 million from the State’s surplus on property tax relief. This would apparently wipe out the State’s surplus. The State would also pay for increases in child welfare levies this year. That would free up about $50 million on the local level.
Senator Kenley, probably the biggest mover and shaker in the General Assembly on the property tax issue had this to say about a special session:
“The public wants this thing to be permanently corrected, and I think if you go into special session, expectations are that will happen,” Kenley said. “I think it’s clear that we have a ways to go before we can make permanent changes to alleviate this property-tax problem.”
With the House Republicans proposing that the State pay for more government obligations, it seems like a good place to repost a comment Brenda left that nicely describes the State/Local interaction on the property tax issue:
Prior to 2007:
State: Ok, counties, you must do (and pay for) these 5 things
Counties: But, but, that will cost us 10 pennies
State: Ok, not totally fair for your taxpayers, how about we kick in 5 pennies – weâ€™ll call it an exemption
Cut to 2007
State: oh, hey, we donâ€™t have very much money. Weâ€™re only going to kick in 2 pennies this year.
Counties: but, butâ€¦ we still have to do those 5 things, right? And they still cost us 10 pennies.
State: Whoo hoo, look at usâ€¦ we have an extra 3 pennies! Arenâ€™t we being smart with taxpayer money!!
Taxpayers: Uh, wait a secondâ€¦
State: What? You taxpayers need to talk to your counties about how much money theyâ€™re spending! (Weâ€™re running a surplus, weâ€™re running a surplus!)
Counties: Uh, wait a secondâ€¦
OK, I’m a little thick. What did the state stop paying counties for, yet still requires?
Among other things, I think child welfare payments are required by the State but paid for with county property taxes. Also, juvenile detention fees are for detentions ordered by judges (State officials) with kids housed in state facilities but paid for out of county revenues.
Those are a couple of the more expensive things.
Doug, you may be aware of this more than I… I assume you’re in favor of moving counties off of the property tax system into the COIT system. What would happen to counties of smaller population (fewer taxpayers) or economic depression (less wages earned) where the property tax revenues might actually be more manageable than going to the COIT model? I’m thinking specifically of like a Union County (which I’m sure you’re familiar with) or maybe areas like Grant and Madison Counties where large employers have left the states. Just curious…