Niki Kelly has a good summary of where the legislature stands with respect to restructuring Indiana’s taxes to reduce the property tax component. The plan starts with a 16.6% increase in the sales tax (from $0.06 of every dollar to $0.07). That part of the plan is something upon which the “three sides” apparently agree — the three relevant sides being Gov. Daniels, the House Democrats, and the Senate Republicans.
In addition, Ms. Kelly reports, there are 5 main components:
1. Circuit breakers. These cap the maximum potential property tax at a percentage of the property’s assessed value. One percent for owner occupied residential; two percent for other residential; and three percent for business. This is in the ordinary legislation but also proposed as a constitutional amendment. The House Democrats have proposed basing the Constitutional cap on income rather than assessed property value.
2. State assumption of local education and child welfare levies.
3. Local spending controls. “All” sides (meaning 3 parts of the State Government) blame local government despite local government’s relatively small contribution to the property tax problem.
4. Referendums on local construction projects.
5. Overhauling the township assessor system.
Now we’re into the final push. The papers tell us that property tax payers are demanding relief. We’ll see if they get that along with a side of sales tax increase.