Kruse Report: Indiana Property tax reform: Hopefully more than just talk this year
Submitted by kpaul.mallasch on Sat, 04/21/2007 - 11:59am.
By Sen. Dennis Kruse
For the past several years, property taxes in Indiana have been a lot like the weather. Everybody talks about them, but nobody does anything about them. They have been as unpredictable, it seems, as a thunderstorm in December – or snow flurries in April.
The concern so many people have is real. Property taxes have risen an astounding 450 percent since 1981 and are expected to jump a statewide average of 15 percent for homeowners this year.
But at last, Hoosiers may see a true property tax reform plan, thanks to members of the Indiana Senate. The Senate is offering to Hoosier residents a significant breakthrough in property tax relief.
The plan’s key components include having the state assume responsibility for all school general fund expenses and juvenile detention costs while sharing child welfare cost increases. It more closely aligns state spending with state responsibilities and local spending for local responsibilities. It will further simplify the school funding formula and takes schools out of decisions concerning local option income taxes.
By doing those things, the plan will neutralize the largest drivers of property tax increases.
Here’s how the plan would work:
Many are surprised to learn that state government only receives 0.1 percent of property taxes collected. Latest figures show schools account for 48.3 percent; county governments 21.1 percent; cities and towns 18.4 percent; other local government functions 4.8 percent; libraries 4 percent; township governments 3.2 percent; and tax increment financing (local economic development) 0.2 percent.
The advantages of this plan are clear. There would be savings on future property tax bills. It gets the state out of the subsidy game. It more closely aligns state spending with state responsibilities and local spending with local responsibilities. It will further simplify the school funding formula and takes schools out of decisions concerning local option income taxes.
So, property taxes and the state budget will be two topics to watch in the final days of this 115th Indiana General Assembly. With bi-partisan support, we could see the biggest breakthrough in property tax relief since I’ve been a member of the legislature. Now, if we could only do something about that unpredictable Indiana weather….
Please contact me at State Senator Dennis Kruse, Indiana Senate, 200 W. Washington Street, Indianapolis, IN 46204 or call 1-800-382-9467, or send e-mail to S14@in.gov.
For the past several years, property taxes in Indiana have been a lot like the weather. Everybody talks about them, but nobody does anything about them. They have been as unpredictable, it seems, as a thunderstorm in December – or snow flurries in April.
The concern so many people have is real. Property taxes have risen an astounding 450 percent since 1981 and are expected to jump a statewide average of 15 percent for homeowners this year.
But at last, Hoosiers may see a true property tax reform plan, thanks to members of the Indiana Senate. The Senate is offering to Hoosier residents a significant breakthrough in property tax relief.
The plan’s key components include having the state assume responsibility for all school general fund expenses and juvenile detention costs while sharing child welfare cost increases. It more closely aligns state spending with state responsibilities and local spending for local responsibilities. It will further simplify the school funding formula and takes schools out of decisions concerning local option income taxes.
By doing those things, the plan will neutralize the largest drivers of property tax increases.
Here’s how the plan would work:
■ Reduce dependence on local property taxes: The bill would allow local governments to raise local option income taxes dollar for dollar as an exchange for property tax reductions to fund police, fire service, trash collection and other needs.
■ Control excessive spending on new construction projects: The bill would create a county capital projects control board to review and approve taxpayer-funded building projects based on need, costs, size and potential conflicts or overlap.
■ Increase state responsibility for K-12 education and child protection: The state would absorb all school general fund costs as well as juvenile incarceration while also paying 50 percent of child welfare increases.
■ Supplement the state Homestead Credit: This bill would include some additional homestead credit for homeowners this year to give immediate protection against impending increases in property taxes.
Many are surprised to learn that state government only receives 0.1 percent of property taxes collected. Latest figures show schools account for 48.3 percent; county governments 21.1 percent; cities and towns 18.4 percent; other local government functions 4.8 percent; libraries 4 percent; township governments 3.2 percent; and tax increment financing (local economic development) 0.2 percent.
The advantages of this plan are clear. There would be savings on future property tax bills. It gets the state out of the subsidy game. It more closely aligns state spending with state responsibilities and local spending with local responsibilities. It will further simplify the school funding formula and takes schools out of decisions concerning local option income taxes.
So, property taxes and the state budget will be two topics to watch in the final days of this 115th Indiana General Assembly. With bi-partisan support, we could see the biggest breakthrough in property tax relief since I’ve been a member of the legislature. Now, if we could only do something about that unpredictable Indiana weather….
Please contact me at State Senator Dennis Kruse, Indiana Senate, 200 W. Washington Street, Indianapolis, IN 46204 or call 1-800-382-9467, or send e-mail to S14@in.gov.
»
- Login or register to post comments
- Email this Story
