INDIANAPOLIS | Democratic House Speaker Pat Bauer said his party's property tax relief package might be "dead" after narrow defeat Tuesday night, but the measure also could be exhumed for another vote later this week.
Partisan bickering punctuated more than a hour of debate that ended in a 49-48 vote, which left the tax plan two votes short of passage in the House. A pair of Democrats defected from the party's bare-minimum 51-vote majority, and House Republicans refused to endorse a plan they were give no say in crafting.
"I voted with them several times (Tuesday), they could have given us a little," said Rep. Ed Soliday, R-Valparaiso. He and other Republicans, including Rep. Don Lehe, R-Brookston, said they could have supported the measure House Bill 1007, had Democrats not rejected more than two dozen GOP amendments in the past week.
"They wanted to do this with muscle rather than compromise, and apparently they didn't have enough muscle," said House Minority Leader Brian Bosma, R-Indianapolis.
The legislation, authored by Rep. Bob Kuzman, D-Crown Point, would allow counties to impose individual and corporate income taxes of up to 1 percent and would shift at least $120 million a year in local welfare costs to the state.
"I thought it would have bipartisan support," Kuzman said after the vote. "This is substantial, obviously, to Northwest Indiana -- freezing the welfare levy alone is a substantial property tax relief."
Bauer said "property tax relief is dead for the 2007 session" unless Gov. Mitch Daniels, a Republican, can drum up at least a couple of GOP votes in the House.
Bosma said a few Republicans were prepared to vote for the measure before it was thoroughly explained to them in a nearly three-hour caucus meeting Tuesday afternoon. Soliday said he's confident that HB 1007 "isn't the last bite of the apple" for those looking for tax relief before the General Assembly adjourns in April.
Two northern Indiana Democrats, Mishawaka Rep. Craig Fry and Rep. Ryan Dvorak, D-South Bend, voted against the measure.
Republicans argued the legislation would drive employers out of state with its proposed tax on corporate income, and that a so-called "commuter tax" distribution of the individual income tax would benefit urban counties and the expense of their rural counterparts.
"Who's going to get the $600 million in relief? Is it all going to Lake County? is it all going to Marion County? I don't know, they don't every tell you," Fry said, echoing GOP sentiment.
After the vote, Democrats released an analysis indicating that the local income tax included in the legislation could reduce property tax levies by a statewide average of 16 percent in 2008. Lake County would see a 10.8 percent reduction, compared to an estimated 22 percent drop for Porter County.
Local governments would be require to use at least 60 percent of the individual income tax revenue to cut property taxes, and could spent the rest on police, fire and other public safety operations.
Because it did not pass or fail by 51 votes, HB 1007 can be recalled for another vote as early as Thursday, which gives Democrats a few days to meet next week's deadline to move legislation to the Senate.
