Indiana State Rep. David Orentlicher files plans to deliver immediate long-term property tax relief to Hoosiers

Press Release

State Rep. David Orentlicher (D-Indianapolis) announced today that he will file legislation for the 2008 session of the Indiana General Assembly that will provide both immediate and long-term property tax relief for Hoosiers.

Orentlicher's proposals would cap homeowners' property taxes in 2007, then cut those taxes by more than 60 percent for 2008 and beyond. In all, Hoosiers will see their property taxes reduced by $2.5 billion.

"While it is good to see the development of a bipartisan consensus to end the property tax nightmare facing the people of Indiana, we need relief now, and we need greater long-term relief than offered by the governor and the Commission on State Tax and Financing Policy," Orentlicher said.

"The legislation I am announcing today will address the immediate burdens being faced by so many homeowners across this state, will set into place a series of reforms that will make our property tax system both affordable and fair, and will require state and local governments to exercise greater fiscal restraint and accountability," he continued.

Orentlicher's relief plan initially calls for homeowners' property taxes in 2007 to be capped at 1.5 percent of assessed value.

"In Marion County and other counties that have a property tax freeze, this relief would show up as a credit against the amount due in the third 2007 tax bill that is scheduled to be issued (April in Marion County)," Orentlicher said. "In counties where people already have paid their 2007 taxes in full, the relief would be applied as a credit to the first property tax bill issued in the spring of 2008."

The cost of this circuit breaker, which Orentlicher estimated at $72 million, would be financed through the state budget surplus, a move the lawmaker said would prevent a tax shift to other property taxpayers and ensure that schools, and police and fire departments will not lose revenues for essential services.

"The new reassessments ordered by the governor, as well as the rebates approved by the General Assembly earlier this year will provide many homeowners with the relief they need for that third 2007 tax bill," Orentlicher noted. "My 1.5 percent circuit breaker will make sure there is sufficient relief for those for whom the reassessment and the rebate are insufficient."

The second phase of Orentlicher's plan is designed to produce long-term relief for taxpayers. It includes:

* $400 million in immediate spending cuts by absorbing child welfare and other local costs in the state budget;

* a better balance in tax burdens by increasing corporate property taxes by $300 million to provide property tax relief for homeowners and renters;

* fairer taxation of homeowners and renters by providing the same 62% cut in property taxes to both;

* fairer taxation of all taxpayers by replacing $2.1 billion in property taxes with state income and sales taxes, thereby reducing the disparities in tax rates from township to township; and
* greater protection for people on fixed and lower incomes by capping property taxes when they exceed a certain percentage of the homeowner's income.

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