Indiana’s November ballot will feature a pocketbook issue of historic proportions.
Public Question #1 will decide if the state’s property tax caps should become part of the state constitution.
The caps are already in place, and limit a homeowner’s property tax bill to one percent of assessed value, two percent for rental and farm property, and three percent for business and industry.
The tax caps have been written into Indiana law, but haven’t yet been written into the constitution.
“Putting it in the constitution will make those rules much more permanent than they are when they’re just in law and could head off any constitutional challenges to those tax caps,” said Larry DeBoer, with Purdue’s Department of Agricultural Economics.
Governor Mitch Daniels has long lead the fight to make property tax caps part of the constitution, although he didn’t invent the idea.
“I have a son that lives in California, and he has been living with Proposition 13 for many, many years there,” said St. Joseph County Auditor Peter Mullen.
California’s property tax caps have been in place since 1978.
Mullen says that in his son’s central California community, the municipal swimming pools have closed, and library services have nearly dried up.
“Library is open one day a week in his little community and any support that they may have is volunteer payment and volunteer money to go to the libraries,” Mullen said.
Perhaps that’s why the Indiana Library Federation heads up a coalition fighting against the Hoosier tax cap proposal. The Indiana P.T.A. and the Urban School Association have signed up as allies.
On the pro tax cap side you’ll find the Indiana Association of Realtors, the Indiana Manufacturers Association, and pharmaceutical giant Eli Lilly and Company.
Some are bothered by the fact that businesses, not homeowners, reap the greatest tax cap benefits.
“In fact, the latest statistics are only 13 percent of the so called benefits under the tax caps are going to homeowners, the rest is going to the other property classes,” said Ind. Sen. John Broden, (D) South Bend.
Auditor Mullen also noted that “some of our (St. Joseph County’s) biggest taxpayers (business) are located in other states, Michigan, Illinois.”
Voters should be aware that their property tax bills will not be lowered any further if Public Question #1 passes.
“You’ve already gotten all the tax relief that the tax caps imply,” said DeBoer.
Two prominent lobbying organizations in Indiana have opted not to take part in the property tax cap debate: The Indiana Farm Bureau, and the Indiana State Chamber of Commerce.
Both have expressed reservations about the caps becoming constitutional—but both will stay on the sidelines in the months leading up to the election.