Indiana News

Legislature Will Return Next Month to Consider Veto Override

Bill would retroactively legalize $7M in tax overcharges in two counties

5/23/2013


Senate President Pro Tem David Long (left) and House Speaker Brian Bosma (WIBC.com file photo: Eric Berman)

The General Assembly will reconvene next month for an unprecedented one-day session to vote on overriding one of Governor Pence's vetoes.

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Jackson and Pulaski Counties each imposed local income taxes in 1998 to fund construction of new jails and juvenile detention centers. But both counties forgot the law set a time limit before requiring them to drop the tax rate to 1%. As a result, Pulaski's been overcharging residents by .3% for seven years, while Jackson's levy has been .1% too high since 2011.

Governor Pence vetoed a bill to legalize the higher rates retroactively. House Speaker Brian Bosma and Senate President Pro Tem David Long says an override vote can't wait till the next session starts in November. Bosma says it would be an "administrative nightmare" for the Indiana Department of Revenue to calculate years of refunds, including for some taxpayers who no longer live in those two counties.

Long says Pulaski County has been charging the incorrect rate for so long that refunds for the first four years of overcharges are now barred by the statute of limitations. He says fixing the overcharges could end up more costly than simply legalizing them.

Pence's veto message says people deserve relief if they pay taxes they don't owe. The governor says validating the higher rates retroactively "is not the proper remedy."

State fiscal analysts estimate Pulaski County would collect an additional $850,000 in taxes and Jackson County an additional $750,000 if they're allowed to keep the higher rate in place for the next fiscal year. It's likely the yearly overcharges are close to that amount, but analysts haven't supplied an official estimate.

Overriding a veto in Indiana requires only a simple majority in the House and Senate. Senator Jim Banks (R-Columbia City) was the only legislator to vote against the tax bill.

The legislature gave the speaker and president pro tem the power in 1995 to call legislators back for a day for override votes or to fix technical errors. This is the first time they've done so.

Bosma and Long say Pence's two other vetoes will not be considered, but legislators may put together a bill to fix about 30 minor errors discovered since the legislature adjourned last month. Those fixes would normally wait until next year.

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