SB 17 concerning redevelopment commissions and Tax Increment Financing passed the Senate 47 – 0. I haven’t read it through to understand all of it, and what I do understand is too dull to recount at the moment. But, generally, the bill limits the maximum time for bond issues for economic development; alters the decision making process for TIF allocation areas; and specifies the applicability of the petition and remonstrance process for TIF allocation areas.

SB 1 passed the Senate unanimously.

Beginning January 1, 2010, it terminates a number of tax levies. Specifically: (1) the medical assistance to wards property tax levy; (2) the family and children’s property tax levy; (3) the children’s psychiatric residential treatment services property tax levy; (4) the children with special health care needs property tax levy; (5) the maximum permissible tuition support levy; and (6) the county supplemental school financing property tax levy. It specifies that the termination of the tuition support levy does not prohibit a school corporation from imposing a referendum tax levy.

Presumably these services will have to be financed through other funding sources, legislation for which would have to originate in the House.

The Indy Star has an article reporting that Senator David Ford (R-Hartford) has been hospitalized for, as yet, undisclosed health reasons. Here’s to a speedy recovery from whatever it is.

Update More from the Fort Wayne Journal Gazette. Apparently, Sen. Ford has cancer. Once again, good luck to Sen. Ford, and strength to his family. What a tough thing.

At the Indiana General Assembly, this will likely be a day, even more than usual, where property taxes will dominate the discussion. The House of Representatives is supposed to take up HB 1001, the budget bill, on Second Reading. This is the stage at which all members of the House get to offer amendments to the bill. I suspect it will be a very long day for the House.

Mary Beth Schneider and Bill Ruthart have an article in the Indy Star entitled “Lawmakers push tweaks to tax plan.”

It all begins at 9 a.m., when the House convenes to consider amendments to Gov. Mitch Daniels’ property tax reform plan. Daniels’ proposal, included in House Bill 1001, would cap homeowners’ bills and increase the state sales tax to 7 percent. His proposal also would eliminate township assessors and institute new spending caps for local governments.

As of Friday, 58 amendments to HB 1001 had been filed. (Update – over 100 as of today.) Lawmakers have until 8 a.m. today to file additional changes. The contents of those amendments won’t be made public until after that deadline.

Meanwhile the Senate Tax and Fiscal Policy Committee will discuss some significant changes to The Daniels Plan which would apparently reduce revenue to local government by $600 billion in its current form. Sen. Kenley is proposing a phase in so that the reduction in revenue to local government would come more gradually.

Kenley proposes to phase that in so that local governments instead lose about $298 million. Under his amendment, homeowners’ bills would be capped at 2 percent this year, 1.5 percent in 2009 and 1 percent in 2010.
Rental property and second homes would be capped at 3 percent in 2008, 2.5 percent in 2009 and 2 percent in 2010. Business property, at 3 percent, would not be capped until 2010.

He is also proposing that local government construction approved by referendum be exempt from the proposed property tax caps under the rationale that “A referendum is kind of a statement of the people as to what they’re willing to spend money (on), and I think that probably needs to override a decision of elected people or political people.”

I just came across the Indiana Law Blog’s quote of a story by John Byrne in the Gary Post-Tribune:

Glorified broom closets often host the legislators and crowds of interested officials, lobbyists and citizens (aka noncombatants) there to testify about the merits of a particular bill.

Chairs are fought over jealously in these meetings, with VIPs sending flunkies ahead to stake claims, and ostentatious briefcases left on seats as territorial markers long before testimony begins. * * *

The handful of remaining chairs were quickly snatched up, leaving a man who had made a special trip to the Statehouse for Daniels’ appearance griping about getting cut out of the governmental process.

“I drove up here from Evansville for this?” the guy shouted. “So I can stand out in the hall and watch on TV? Where are the seats?”

I haven’t been to a committee hearing in years, so I don’t know exactly how things are today. But, the committee rooms in the early 2000s were significantly improved from those in the late 90s. There was a fair amount of renovation during that time period. While still not opulent, the committee rooms shortly after I stopped working for the legislature were much improved from the way the committee rooms were when I was working at the State House.

As for seating, my recollection was that a few of the higher profile bills might cause seating shortages; but the vast majority of bills passed through committee with a lot of empty chairs in the room.

If I were the legislature, I guess I wouldn’t rush out to spend a bunch of tax money to improve facilities just at the moment. The renovations in the early 2000s were necessary — I recall a conference room with wires hanging down from the ceiling. And the study carrels that served as “offices” for the rank and file House members were a little embarrassing.

Lesley Stedman Weidenbener has a good article in the Louisville Courier Press on the disparate impact of the Daniels Plan to shift taxes to mitigate the property tax increases of recent years. Obviously, it’s not that surprising to learn that there are winners and losers. But, this article gives some numbers for a few areas.

Despite prior promises to the contrary, Senator Hershman will act to protect us all from having our marriages forcibly dissolved before being forced into homosexual marriages. At least that’s about as fair a reading of SJR 7 as is usually given by its proponents. Jim Shella is reporting that Hershman intends to advance the resolution in the Senate despite previously stating that he would wait for action in the House.

SJR 7 says, among other things:

This constitution or any other Indiana law may not be construed to require that marital status or the legal incidents of marriage be conferred upon unmarried couples or groups.

This proposed Constitutional amendment is obviously targeted at gays, but it really affects all unmarried couples. The plain language of the Amendment prohibits the extension of particular legal rights to unmarried couples.

You know what? We’ve got real problems. And, it just might be that those problems are worse than they needed to be because our “representatives” have wasted so much energy on nonsense like this.

The Courier Journal calls it a “tax relief” plan, but The Daniels Plan – call it restructuring, tax shifting, relief for some – higher taxes for others – but come on, simply “relief” or “reform” belongs in the editorial pages, not the news pages. Once again, that’s not to necessarily criticize the plan, but the language used in straight news needs to recognize that it’s relief or reform for some, and simply higher taxes for others to whom taxes shift. All right, off of this particular tedious soap box.

HB 1001 was passed unanimously without debate or amendment. Rep. Crawford who chairs the committee said it ought to be considered by the full House, but that moving it along ought not be considered an endorsement, necessarily. The House is scheduled to hear amendments to the bill on Tuesday. Rep. Terry Goodin suggested that upwards of 150 amendments were being drafted for consideration on Tuesday. (Lucky for those poor folks at Legislative Services who have to draft the things.)

The Daniels plan calls for disparate caps on property depending on its use – a 1% cap for homesteads, a 2% cap for rentals, and a 3% cap for business property. The caps would force any necessary tax revenues to come from other kinds of taxes or, alternatively, cut funding for cities, counties, and schools.

Niki Kelly also has a story on the bill. So does Bill Ruthart. Ruthart points out that the property taxes will be made up by a shift to sales taxes. The sales tax would increase from 6 cents on the dollar to 7 cents on the dollar, a sales tax increase of 16%.

Niki Kelly has an article in the Fort Wayne Journal Gazette entitled “Daniels: No to graduated income tax.” Unsurprisingly, the House Ways and Means Committee is looking for new sources of revenue that will replace the money lost if property taxes are reduced. One option is imposing a graduated income tax, similar, I presume, to the federal income tax structure.

The committee could discuss an amendment to House Bill 1001, which contains the governor’s plan, as soon as today to substitute the sales tax increase with a move to a graduated income tax system.

Daniels was in complete opposition, saying adjustments to the income tax are the only options on the table he would actively fight.

“A low, flat income tax rate is a big plus for Indiana,” he said. “It is why we are an island of growth.”

Let’s leave aside, at the moment, whether Indiana truly is an “island of growth.” Why does an increased sales tax allow growth where an increased, graduated, income tax discourages growth?