House Amendments to The Daniels Plan

Lesley Stedman Weidenbener has an article in the Louisville Courier Journal discussing the work legislators did yesterday on tax legislation. She reports that the House of Representatives left The Daniels Tax Plan largely intact.

But they left their mark on the bill with amendments to reduce property-tax savings for those who own more expensive homes, provide income-tax savings to the state’s poorest workers and exempt classroom buildings from a requirement that construction projects be approved by voters.

Also, the House approved amendments to increase an income-tax deduction for renters and freeze property-tax bills at 2008 levels for some who are 65 or older and have homes that are assessed at less than $200,000.

The freeze applies to single homeowners with an income of $35,000 or less or married homeowners with joint income of $50,000 or less.

The amended legislation is structured such that the reduction in property taxes is in full force for homes under $245,000 but diminishes for home values between $245,000 and $800,000.

“This creates fairness,” said the amendment’s author, Rep. Russ Stilwell, D-Boonville. “Your friends and neighbors who pay an extra 1 percent in the sales tax shouldn’t be paying for (the savings of) people who are living in $1 (million) or $2 million homes.”

Republicans opposed the proposal, saying many middle-income Hoosiers own homes with assessments greater than $245,000, particularly if they purchased a property at a lower price and it increased in value.

The Meridian Street tax protesters will not like that. And, in fact, I would suspect that this generally hurts big city property owners more than rural property owners since, I presume, middle class Indy homeowners are much more likely to have $200k+ homes than are rural and small town middle class Hoosiers.