Daniels offers ideas for quick homeowner tax relief

INDIANAPOLIS – Gov. Mitch Daniels gave lawmakers some new options on how to provide quicker and different forms of property tax relief for homeowners this year, floating a series of proposals Saturday that would require a special legislative session.\nThe administration said Daniels was not saying he would call a special session. He was simply putting new ideas on the table for consideration in a year in which property taxes for homeowners statewide are projected to increase an average of 24 percent.\nDaniels’ proposals included giving counties flexibility in how to distribute $300 million in tax relief the General Assembly approved this year and provide tax breaks to homeowners sooner – as credits on their fall bills – instead of getting rebate checks later in the year or early next year.\n“He wants to keep the ball rolling with options that may be available,” said Daniels spokeswoman Jane Jankowski.\nIn a letter to legislative leaders, Daniels said some Hoosiers “have received property tax bills that are simply unacceptable,” and that he had taken some actions on his own to ease the crunch. Those have included allowing counties to postpone payment due dates and permitting taxpayers to pay their bills in installments.\nBut on Saturday he offered new ideas that would require legislative approval, including some that would give counties various options they could use to target tax breaks to homeowners hardest hit this year.\nOne option would be a so-called “circuit breaker” that limits tax hikes. Marion County, where the average increase in homeowner tax bills is 34 percent, could use its $45 million share of tax relief to cap tax hikes at 1.6 percent of a home’s assessed value. If you owned a home assessed at $100,000, for instance, you would pay no more than $1,600.\nHoward County could use its estimated $4.4 million in state tax relief to limit bills to 1.1 percent of assessed value.\nUnder the law enacted this past legislative session, $300 million in projected slot-machine licensing revenue is to be allocated to all homeowners eligible for the state homestead credit for taxes payable this year, and is to come in the form of rebate checks sometime after fall tax bills are sent out.\nThe amount of the refund would vary by county and even by taxing district. The refund for a typical Indiana home with an assessed value of $151,000 and a tax bill of $1,817 would see a refund of $236. However, those with higher-valued homes or those paying higher-than-average tax rates would see more.\nHouse Speaker Patrick Bauer, D-Indianapolis, and some Republicans – who rule the Senate – favored the rebate plan. That was in part because they wanted local taxpayers to know, through a notice with their rebate checks, that the General Assembly had done something to lower their bills.\nDemocrats who control the House and Republicans that rule the Senate agreed on that approach, and the day after the session ended, Daniels did not indicate he had a problem with it. He said he was proud the Legislature had provided relief, and the way in which lawmakers were doing it was OK with him.\nBut as property tax bills have gone out, the increases in homeowner tax bills in some counties – or just those within taxing districts in counties – have exceeded 30 percent.\nReactions to the governor’s proposals were mixed.\nSenate Tax Chairman Luke Kenley, R-Noblesville, questioned the idea of targeted tax relief and how it would work, and whether Daniels was committed to steering all the relief to homeowners as the Legislature intended. Kenley, as chairman of an interim panel of lawmakers on tax policy, said more study and consensus-building is needed in order to act.\nHe said he was pleased that Daniels was trying to seek solutions, but without consensus and support from Democrats who control the House, a special session would be a waste of time.\nKenley’s committee will begin hearings on the issue on July 23, and Daniels said in his letter that he wanted to add his ideas into the mix.\nBauer said the governor’s proposals were “tweaking” and did not warrant a special session.\n“If you want a special session you need to have a serious, substantive plan,” Bauer said. “Now he’s just coming up with a few ideas.”\nRep. Jeff Espich of Uniondale, the fiscal leader for House Republicans, said tax credits on fall bills instead of rebate checks later would help people “sooner rather than later.”\nIf there was a special session, Espich said, he hoped it would go beyond temporary property tax relief and result in long-lasting reform.