7/12/2007
Media Contact:
Steve Campbell, [317] 327.3622
Margie Smith Simmons, 327.3690 |
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Mayor offers first action to reduce property taxes by $75 million this year
Peterson: State still needs special session this year or crisis will occur year after year
INDIANAPOLIS – Mayor Bart Peterson today announced the first real plan to cut Marion County property taxes this year, to the tune of $75 million.
He also reiterated that without a special session of the Indiana General Assembly, this crisis would reappear again and again.
While there have been some moves to help homeowners by allowing installment payment plans, extending the deadlines and studying the problem, Peterson said, unfortunately none of these suggestions actually reduce bills this year.
“It is undeniable that this property tax crisis is statewide, and in Marion County, it is compounded by tens of millions of dollars in State-mandated increases,” Mayor Peterson said.
“Clearly the governor and the state legislature are taking these statewide problems seriously, but so far, no one has offered a plan to lower bills this year, so we are putting forward a plan that addresses the immediate issue, he continued. “ But if the state does not take action in a special session, next year we’ll be right back where we started.”
The plan includes three parts:
- Provide an $75 million in property tax relief in Marion County only, without a special session;
- Provide additional relief to taxpayers statewide and in Marion County with a special session of the Indiana General Assembly; and
- Support for a new assessment of Marion County, if ordered by the state.
Background.
- Provide an $75 million in relief to Marion County homeowners, without a special session;
- Provide $45 million in relief by phasing in the State-mandated payment by Marion County of child welfare and juvenile incarceration costs. Increases in costs for mandated State payments over the past two years have included: a $27 million increase in property taxes for State child welfare costs in 2007; a $34 million one-time payment in 2007 for past State child welfare costs; and several $19 million payments for past State costs for incarcerating Marion County juveniles.
- Provide $30 million in relief by utilizing the 2007 calendar year portion of the fiscal year 2008 Marion County local option income tax. The State requires the new anti-crime income tax to start October 1. Since the city budget does not start until January 1, 2008, these funds can be used for property tax relief. This requires the county to manage the cash flow until 2008 funding but will not impact the city’s crime-fighting plan.
- Provide additional relief to homeowners statewide, and in Marion County, with a special session of the state legislature. The Mayor pointed out that by convening special session, the Indiana General Assembly could provide additional relief for homeowners statewide, including those in Marion County, by:
- Taking over the responsibility for child welfare costs, saving Marion County taxpayers $68 million a year.
- Lift the State’s freeze on property tax replacement credits for 2007, saving $25 million in 2007.
- Give local governments the authority to make themselves more efficient, including passing the remainder of Indianapolis Works, which would save taxpayers $22 million a year.
“We cannot wait until next year,” he added. “If the state legislature comes back into session and addresses this issue, it would mean immediate property tax cuts for Marion County homeowners.”
“We must address the underlying causes – like the unfunded State mandate of the child welfare budget, unnecessary layers of government, and disjointed property assessments – and only the legislature and a special session can do that,” the Mayor added.
- Support a new property tax assessment of Marion County, if ordered by the state. Peterson also said a new property tax assessment for Marion County, to correct potential overassessment of residential properties, is welcome if ordered by the state.
Why property taxes are rising. Property taxes are expected to rise this year across the State, especially in Marion County for several reasons:
• The elimination of the inventory tax has shifted the tax burden from businesses to homeowners this year without any State support to replace it.
• Potential underassessment of commercial property, shifting the tax burden to homeowners.
• The State capped the “property tax replacement credit,” which provided annual relief to property taxpayers, two years ago and have caused taxes to rise.
• Many school capital projects hit at the same time this year.
• Mandated State payments for child welfare and juvenile incarceration increased dramatically in 2006 & 2007.
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