By Eric Berman
11/5/2009
Next year is the last chance for supporters of a constitutional cap on property taxes to get the proposal through the General Assembly without starting from scratch. Two weeks before the session's ceremonial start, it's still unknown whether they'll get the chance.
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Legislators have two years to approve constitutional amendments, then two more years to pass them a second time. The amendments then go to the voters in the next election for a final decision.
In 2008, amid widespread fury over soaring tax bills, the House and Senate capped property taxes at 1.5% of a home's value, with caps of 2.5% for apartments and 3.5% for businesses. The law lowers those caps to 1%, 2% and 3% next year. At the same time, legislators began the amendment process, adopting a proposal laid out by Governor Daniels to make the 1-2-3-percent caps part of the constitution.
The required second approval must come in 2009 or 2010. In this year's session, House Speaker Patrick Bauer (D-South Bend) blocked consideration of a cap, saying lawmakers should take the extra year to gather more data on how the caps on the books now are working.
Bauer says he's not ruling out a vote in next year's session.
"I want to work with others, especially those that seem rabid about getting it into the constitution," Bauer says. "(But) being that rabid makes you worry about what they're afraid is going to be revealed about it."
A state study released last month calculates the caps will save property owners $137 million in taxes this year.
Bauer's concern has been the effect on local governments. Every dollar of relief for homeowners equals a dollar cut from local government budgets. When the tax ceiling drops next year, the Legislative Services Agency says cities and counties will lose another $100 million. LSA says 38 cities and two counties can expect budget cuts of more than 10%, with seven cities forced to rein in spending by more than 30%.
But Bauer notes many of those cities haven't taken advantage of alternatives the state has offered, such as local income taxes.
Passage of the amendment is all but assured in the Senate. 65 current House members voted for the amendment when it was first proposed in 2008.
17 representatives -- nine Democrats and eight Republicans -- won their seats in the 2008 election and have yet to cast a vote on the amendment.
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