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Leonard’s vote is to keep hope alive for property tax caps |
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Monday, March 03 2008 |
By TJ HEMLINGER
Staff writer
A property tax relief plan is working its way through the General Assembly, but it’s not the bill most legislators and the governor are hoping for.
The House voted 64-35 on Thursday to place income-based property tax caps into the state’s constitution. Rep. Dan Leonard, R-Huntington, voted for the bill while Rep. Matt Bell, R-Avilla, voted against Senate Joint Resolution 1.
“It’s the only avenue we have left if we want to put permanent caps into the constitution,” Leonard said Friday. “There’s no other bill or resolution out there.
“Income-based property tax is a bogus idea, but we need the resolution still active so we can put caps in during a conference committee (with the state Senate).
“I could have voted either way, but I wanted to keep it alive and hope we get something straightened out in conference. It we don’t, I’ll vote against it.”
Leonard said one reason he voted for it was because of all the comments on a constituent survey he received. He said there was nothing about concerns over immigrants receiving medical care, welfare or in-state tuition.
He said the property tax bill in its current form will cost taxpayers $2 million to $2.5 million.
“I hope we can clean a bunch of that up in conference committee.”
Leonard explained that in caucus meetings the Republicans were committed to passing SJR1.
“That was the only thing out there left, and we wanted something (on the floor),” he said. “I don’t think anyone in the caucus believes in income-based caps. (Rep. Jeff) Espich said it was ‘bizarre, mysterious and squirrelly.’”
The bill place the cap on property taxes for homeowners at 1 percent of household income.
Leonard said, “The property tax replacement credit has been averaging a 7 percent to 9 percent increase annually.”
He noted that Whitley County has been “very good” at keeping its taxes down.
“It’s the big metropolitan counties that have been spending too much,” he said.
The proposal would have the state freeze the property tax replacement credit at about 4 percent. If counties continue to increase spending at 7 percent to 9 percent, “they’ll have trouble,” Leonard predicted.
“The governor (Mitch Daniels) wants to get the state completely out of property taxes,” he said. “Currently the state is paying 85 percent of the school’s general fund, for school transportation and the child welfare levy.”
To pay for picking these up, the state will keep the property tax replacement fund at its current level, but there will not be enough revenue to cover it, so it will be short by approximately $700 million. To cover that, the governor is proposing a one-cent increase in the state sales tax to 7 percent. Counties would be responsible for property taxes at that point.
Leonard said, “How will that affect people’s property taxes? In every scenario, it raises property taxes.”
He said there are some states that use a similar formula, including Maryland, which is one of the highest per-capita tax states in the country. Indiana is 41st in tax per capita.
“Why do we want to be like Maryland?” Leonard asked. “I think we’re silly to look at Maryland, which is way at the other end of the spectrum.”
Leonard predicted that income-based property taxes “will go away.”
“I’m not sure how we’ll get it out (of SJR1),” he said. “I hope we’ll get somewhere closer to the governor’s proposal.”
Daniels has proposed capping property taxes at 1 percent of assessed valuation for homeowners, 2 percent for apartments and 3 percent for businesses.
“There’s not going to be a huge effect here in Whitley County,” Leonard said.
But what it would do is force local units of government to reduce spending and take responsibility for raising the local option income tax.
“If we want to lower property taxes, we have to reduce spending,” Leonard said. “The governor’s plan screws down spending in local governments, which in turn should lower property taxes.
“Property taxes are all local taxes,” he said. “Constituents want better services, so we have local people working hard to supply those services. They want potholes filled, better police protection, better fire protection. The state comes along and puts costly mandates on local government funded out of property taxes. The federal government, too.
“We’re all in this together. We (legislators) understand that if we cut property taxes, there may be some service cuts.”
Leonard said when there are 60,000 people complaining about property taxes, “I listen.” His survey of constituents showed that the No. 1 issue was property taxes. Illegal immigration was No. 2.
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Last Updated ( Tuesday, March 04 2008 )
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