INDIANAPOLIS | Shaking off the lethargy typical of the first day of legislative session, state Senate leaders advanced several taxpayer friendly measures Tuesday and worked into the evening on another.
The House, meanwhile, kept with tradition, gaveling in and out in less than 10 minutes and putting off committee work until today, when the Ways and Means Committee will travel to Fort Wayne for a hearing on Gov. Mitch Daniels' plan to cut property taxes.
One plank of the governor's multipronged plan cleared an initial hurdle Tuesday, with the Senate Tax and Fiscal Policy voting 9-3 to require referendums on new libraries, schools and other local construction projects.
School debt has been singled out as the biggest driver of rising property taxes, and Daniels argues it's time to give voters more influence over the fate of capital projects. But school association lobbyists said lawmakers shouldn't scrap Indiana's petition and remonstrance system, which pits project supporters and opponents against each other in contests won by whichever side gathers the most signatures.
"It may be working for you," Sen. Luke Kenley, R-Noblesville, told the school officials. "But I don't know if the taxpayers feel it's working for them."
The tax panel also sent the full Senate a measure that would tighten the reins on tax-increment financing, or TIF, districts. The legislation, embraced by East Porter County School Corp. officials, would require TIF dollars to be spent in the geographic area in which they are raised. The measure also would cut in half -- to 25 years -- the limit for financing such projects and give affected school districts a nonvoting seat on local redevelopment commissions.
A separate Senate panel spent several hours Tuesday afternoon and evening entertaining a populist push to abolish property taxes. Conservative activist Eric Miller attracted a crowd of about 50 to an earlier news conference in support of the repeal effort.
"For a lot of people, this is like the 11th commandment," said Sen. Frank Mrvan, D-Hammond. "This is a crusade. There is a lot of support for it, but I honestly don't think it's practical."
Miller released a report claiming property taxes could be vanquished with modest sales and income-tax hikes and iron-clad caps on state and local spending. But legislative fiscal analysts offered a splash of cold water, saying lawmakers would need to more than double the 6-percent sales tax or nearly triple the 3.4-percent income tax to replace the more than $6 billion raised by property taxes.
