INDIANAPOLIS | Gov. Mitch Daniels' plan to cut and cap homeowner property taxes cleared the Indiana House on a 93-1 vote Thursday afternoon.
House Speaker Pat Bauer, D-South Bend, called it "an historic event" for such an expansive tax restructuring effort to receive wide support this early in the legislative session. He said it bodes well for cooperation with the Republican-led Senate.
"We've had bipartisan support," Bauer said. "Now we need bicameral support."
House Minority Leader Brian Bosma, R-Indianapolis, agreed that the vote represented "a very substantial accomplishment." But the GOP floor leader said he remains troubled by a Democratic amendment to the bill that exempts school classroom buildings from the voter referendums Daniels wants to require for local construction projects.
State Rep. Craig Fry, D-Mishawaka, was the only lawmaker to vote against the plan, which is contained in House Bill 1001. He complained the legislation too closely resembles a past tax-relief effort that, he said, failed to deliver on promises to homeowners.
"I just can't believe we're buying into this garbage all over again," Fry said during floor debate.
The legislation, which advances to the Senate, would:
* cap tax bills at 1 percent of assessed value for homeowners, 2 percent for landlords and 3 percent for businesses beginning in 2009.
* shift $1.1 billion in school and welfare costs off local property taxes and onto the state's ledger.
* raise the state sales tax by a penny, from 6 percent to 7 percent, to pay for the welfare and school swaps.
* require referendums on most local construction projects but not school classroom buildings.
* eliminate township tax assessors.
* double the state income tax deduction for renters from $2,500 to $5,000.
