INDIANAPOLIS | New estimates show that Indiana's limits on property tax bills will have less of an impact on taxpayers and local governments than previously thought.
The Legislative Services Agency estimated last March that caps on property tax bills could reduce revenue to local governments by about $524 million in 2010, when the caps will be fully implemented. The new estimates show an impact of about $403 million, or $121 million less than previously thought.
That's good news for some local governments that feared being hit hard by the caps, but it also means that savings to taxpayers aren't as great as previously estimated.
The new numbers could hurt some counties, but will help many others. In Marion County, for example, the projected revenue impact of the caps fell from $111 million under the old estimate to $63 million under the new figures. Vanderburgh County saw the impact fall from $6.5 million to $5.5 million.
The latest figures reflect updated property tax assessment and levy data, revised growth rates and other factors.
The property tax plan passed during the 2008 legislative session will cap property tax bills to homeowners at 1 percent of their home's assessed value by 2010, with 2 percent limits on rental and agricultural property and 3 percent on business property.
Republican leaders in the Statehouse want to approve a proposed constitutional amendment that would put those limits into the state constitution. If the Indiana General Assembly approves the proposed constitutional amendment either in 2009 or 2010, the question would appear on the ballot for voter ratification in 2010.
But Democrats and local government officials want to wait to see the impact of the caps before making them more permanent. The revised numbers could come into play as lawmakers debate the issue.
Senate President Pro Tem David Long, R-Fort Wayne, said Thursday morning before the new numbers were released that lawmakers should move quickly to pass the constitutional amendment. He said local governments need to know that legislators are serious about making the property tax caps permanent.
"We're asking local government to make changes and to be less reliant on property taxes," Long said. "The sooner we lay down the gauntlet and say we're going to go forward with the caps and it's going to go to the voters in 2010, the sooner people can start budgeting and planning for the future at the local level."
