House fails to act on tax caps

The Indiana House of Representatives will not vote on the state property tax cap amendment that passed in the Senate earlier this year.

Despite pressure from Republican representatives, Speaker of the House Patrick Bauer, D-South Bend, did not act on the measure before the deadline for the third reading of bills passed April 15.

The tax caps in SJR1 are already in place around the state, but legislators had to pass a constitutional amendment to make them permanent. This is because the tax caps violate a clause in the state constitution, which says property in Indiana must be taxed equally.

The amendment would limit property tax bills for homeowners to 1 percent of the property’s assessed value, 2 percent for residential rental property and farmland and 3 percent for other business property.

Had the amendment passed in the General Assembly, Hoosiers would have voted on it in a statewide referendum in 2010.

To become part of the Indiana Constitution, an amendment must pass in two consecutive, separately elected sessions of the General Assembly, and Hoosier voters must pass it in the next general election. Both the House and the Senate passed the tax cap resolution last session.

Many legislators have been pleased with the relief the tax caps have provided to their constituents. Some even said they had promised the caps would be permanent.
Republican Leader Brian Bosma has been very outspoken in urging Bauer to call the measure to a vote.

“The foreseeability of having permanent property tax caps serves as a creative engine for local governments by forcing a discussion on initiatives that save taxpayers money through consolidation and efficiency efforts,” Bosma said in a press release. “Every day the caps are not passed reinforces the perception that efficiencies are not needed and all local government must do is wait.”

Bosma said he will continue to fight for permanent property tax reform.

John Schorg, media relations director for the House Democrats, said Bauer did not act on the measure because it is not necessary to call a vote until next year. The General Assembly could pass the bill next session and it would not change the date of the statewide referendum.

“There are bigger priorities right now, like passing a budget and dealing with the unemployment problem,” Schorg said.

Schorg said Bauer wants to wait another year to see what impact the tax caps will have on schools and local governments before he calls it to a vote.

Gov. Mitch Daniels said he is disappointed that the House will not vote on the bill, but he is optimistic about the prospect of tax reform next session.

“This resolution would have passed overwhelmingly if only the Speaker had permitted a vote,” Daniels said. “He’s on the wrong side of taxpayers, and if we can believe their votes on property taxes last year, the wrong side of a majority of his own members. There’s one more inning to this game, and we’ll be back to try again.”