Tax Caps Tabled for Lack of Quorum

Niki Kelly has an article on yesterday’s Senate Tax and Fiscal Policy committee meeting. The committee met in a fairly rare December meeting. Typically House and Senate standing committees don’t meet until after the General Assembly reconvenes in January. Apparently odd scheduling didn’t work out too well in this case. The committee didn’t have enough members present to take a vote. So, the committee meeting was reset for next week. (I played fast and loose with the parliamentary jargon in my headline.)

The committee took testimony on SJR 1 which places the property tax caps into the Constitution. This is state law, currently, but some folks want to get it into the Constitution so that future lawmakers can’t change it if they decide that the current structure is no longer good policy. My position is that there are too many moving parts to the tax cap specifically and our tax structure generally for us to cement the current cap legislation into the constitution.

This is the ungainly block of text they want to put into the Constitution:

ARTICLE 10, SECTION 1 OF THE CONSTITUTION OF THE STATE OF INDIANA IS AMENDED TO READ AS FOLLOWS: Section 1. (a) Subject to this section, the General Assembly shall provide, by law, for a uniform and equal rate of property assessment and taxation and shall prescribe regulations to secure a just valuation for taxation of all property, both real and personal. (b) A provision of this section permitting the General Assembly to exempt property from taxation also permits the General Assembly to exercise its legislative power to enact property tax deductions and credits for the property. The General Assembly may impose reasonable filing requirements for an exemption, deduction, or credit.
(c) The General Assembly may exempt from property taxation any property in any of the following classes:
(1) Property being used for municipal, educational, literary, scientific, religious, or charitable purposes.
(2) Tangible personal property other than property being held as an investment.
(3) Intangible personal property.
(4) Tangible real property, including curtilage, used as a principal place of residence by an:
(A) owner of the property;
(B) individual who is buying the tangible real property under a contract; or
(C) individual who has a beneficial interest in the owner of the tangible real property.
(b) (d) The General Assembly may exempt any motor vehicles, mobile homes (not otherwise exempt under this section), airplanes, boats, trailers, or similar property, provided that an excise tax in lieu of the property tax is substituted therefor.
(e) This subsection applies to property taxes first due and payable in 2012 and thereafter. The following definitions apply to subsection (f):
(1) “Other residential property” means tangible property (other than tangible property described in subsection (c)(4)) that is used for residential purposes.
(2) “Agricultural land” means land devoted to agricultural use.
(3) “Other real property” means real property that is not tangible property described in subsection (c)(4), is not other residential property, and is not agricultural land.
(f) This subsection applies to property taxes first due and payable in 2012 and thereafter. The General Assembly shall, by law, limit a taxpayer’s property tax liability as follows:
(1) A taxpayer’s property tax liability on tangible property described in subsection (c)(4) may not exceed one percent (1%) of the gross assessed value of the property that is the basis for the determination of property taxes. (2) A taxpayer’s property tax liability on other residential property may not exceed two percent (2%) of the gross assessed value of the property that is the basis for the determination of property taxes.
(3) A taxpayer’s property tax liability on agricultural land may not exceed two percent (2%) of the gross assessed value of the land that is the basis for the determination of property taxes.
(4) A taxpayer’s property tax liability on other real property may not exceed three percent (3%) of the gross assessed value of the property that is the basis for the determination of property taxes.
(5) A taxpayer’s property tax liability on personal property (other than personal property that is tangible property described in subsection (c)(4) or personal property that is other residential property) within a particular taxing district may not exceed three percent (3%) of the gross assessed value of the taxpayer’s personal property that is the basis for the determination of property taxes within the taxing district.
(g) This subsection applies to property taxes first due and payable in 2012 and thereafter. Property taxes imposed after being approved by the voters in a referendum shall not be considered for purposes of calculating the limits to property tax liability under subsection (f).
(h) As used in this subsection, “eligible county” means only a county for which the General Assembly determines in 2008 that limits to property tax liability as described in subsection (f) are expected to reduce in 2010 the aggregate property tax revenue that would otherwise be collected by all units of local government and school corporations in the county by at least twenty percent (20%). The General Assembly may, by law, provide that property taxes imposed in an eligible county to pay debt service or make lease payments for bonds or leases issued or entered into before July 1, 2008, shall not be considered for purposes of calculating the limits to property tax liability under subsection (f). Such a law may not apply after December 31, 2019.