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Indiana Election 2011 | Indiana Public Broadcasting Stations

Purdue Economist: Little Change From Constitutional Tax Caps

A Purdue University professor says making property tax caps part of the state constitution won’t change much for the average Hoosier household.

Mitch Daniels Tax Cap Rally

Photo: Marianne Holland

Governor Daniels is backed by supporters of a referendum putting tax caps into the state's constitution.

A Purdue University professor says making property tax caps part of the state constitution won’t change much for the average Hoosier household. Agricultural Economist Larry DeBoer says making the caps permanent will reduce the state’s future flexibility and eliminate a possible constitutional challenge to current state law. DeBoer says taxpayers whose bills are greater than the caps will receive credits, which means less revenue for local governments. The caps limit property tax increases to 1% for residential property, 2% for rentals and farmland and 3% for businesses. DeBoer says most farmers and business owners are against the move, because they fear constant increases in assessed value. Hoosiers will have the chance on their regular ballot Tuesday to vote whether to make the property tax caps part of the constitution.