Mitch Daniels Proposes 33% Property Tax Cut

Gov. Mitch Daniels announced a plan that would cut Indiana taxpayer's property taxes by 33 percent, reports the Northwest Indiana Times. Mitch Daniels' property tax relief proposal speech can be viewed at the governor's website on IN.gov.

Writes the Times' Patrick Guinane:

Gov. Mitch Daniels is asking Hoosiers to embrace a penny sales tax hike and tighter controls on local government spending in exchange for a complex property tax relief plan designed to trim the average homeowners bill by roughly a third.

The proposal presented Tuesday night, which will go before the General Assembly in January, would have the state assume $3.2 billion in school and child welfare costs now shouldered by local property owners. And homeowners would receive future protection, beginning in 2009, from a circuit breaker that would cap tax bills at 1 percent of a home's assessed value.

According to Mitch Daniels' property tax plan fact sheet (PDF), Indiana's governor proposes the following:

1% cap on residential property taxes.

2% cap on rental property taxes.

3% cap on business property taxes.

Use the current formula for agricultural property tax assessments.

Amend Indiana's constitution to make caps permanent.

Local property tax relief funded by a 1 cent sales tax increase ($928 million), tax on race track slots ($100 million), "redeploying state PTRC subsidies to local government" ($2.028 billion), state surplus ($80 million), "use state combined balance to increase 'Rainy Day Fund'" ($50 million; state payment of some local expenses including K-12 schools' budgets and care for abused, neglected and delinquent children. All figures are 2009 estimates, per the governor's office.

Limiting government spending and consolidating property tax assessment system.

See also:

Text of Mitch Daniels' property tax relief speech (PDF).

Mitch Daniels' property tax relief Q&A sheet (PDF).