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Voters, Lobbyists Prepare For Property Tax Referendum

By Marianne Holland, WYI

Posted October 11, 2010

In addition to all the decisions Hoosier voters will have to make on Election Day about who's in and who's out of public office, they'll also have a say on what's in or out of the state constitution.  This is when Indiana residents will have the chance to decide whether to put property tax caps in the constitution.

The property tax caps now in place under state law are set at one percent of assessed value for homeowners, two percent for rental properties and farms and three percent for businesses, though local schools and governments can raise taxes beyond those amounts with voter approval.  The ballot question will be question one, asking very simply, whether a voter approves the amendments to the constitution to allow the caps.  It also asks voters to change the state constitution to permit homestead credits and deductions, as well as exemptions for mobile homes that are primary residences.  Karl Berron is president of the Hoosier Property Tax Reform Alliance.  He said putting the caps in the constitution will protect them from being reduced over time by the state legislature.

"Over the time the experience has been that property taxes have always crept back up and the replacement taxes are still there so in the case of this reform, sales taxes were raised and part of the bargain was that your property taxes would be quote permanently reduced and so this is really the final step in that process to give taxpayers some guarantee that history doesn't repeat itself," he said.

Opponents say  the caps have caused a cut in local services, especially in school districts where voter referendums to increase the tax have failed, and libraries, which can't initiate local referendum votes.

Two large state organizations are opposing the caps because they are not uniform.  The Indiana Farm Bureau and Indiana Chamber of Commerce say it's not fair to tax different types of property owners at different levels.  Kevin Brinegar is president of the Indiana Chamber.  He says despite that opposition, neither organization is lobbying hard against it.

"We are unabashed advocates for business but we try to be practical and pragmatic as well and based on the landscape as it currently stands, and the polling we've seen, trying to mount an opposition to this on the ballot with the constitutional amendment would not be a good use of our time and resources," Brinegar said.

If the measure is approved by voters November second, it will change current constitutional language that requires all classes of property to be taxed equally.

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