Indiana Senate Tax and Fiscal Policy Committee public hearing tomorrow – 1/21/2010

Statement from Indiana Watchdogs:

Hello Watchdogs,

The Indiana Senate Tax and Fiscal Policy Committee has a public hearing scheduled for Thursday, January 21, at 9:00 AM, on Senate Bill 309.

SB 309 is best identified as Business-As-Usual-Bill #1 because it is the first General Assembly bill to increase homeowner property taxes to have a public hearing scheduled since the 2008 property tax reform program.

Please contact your State Representative and State Senator to let them know that you oppose BAUB #1. Information on how to identify and contact your State Representative and State Senator can be found on-line.

The property tax reform program passed by the General Assembly in 2008 will lower 2010 total property taxes $610.6 million and 2011 total property taxes $534.0 million when compared to the 2007 statewide total property tax burden. The portion of the total property tax savings that will be enjoyed by homesteads is $457.4 million in 2010 and $401.9 million in 2011. The total combined $1.1446 billion property tax savings comes from two property tax reform categories.

  1. The 1% – 2% – 3% property tax caps will provide $953.6 million of the combined $1.1446 billion in 2010 and 2011 total property tax savings. The 1% homestead property tax cap will provide $249.6 million of the combined $859.3 million in homestead property tax savings. This property tax reform category would be protected by passage of the constitutional amendment that is expected to be on the ballot this November.
  2. The remaining $609.7 million in 2010 and 2011 homestead property tax savings comes mostly from the 35% supplemental homestead deduction, the state assumption of school general fund expenditures, and the qualified senior homestead credit. The state assumption of school general fund expenditures will help provide property tax savings for other property classes. This property tax reform category is susceptible to erosion by the General Assembly.

BAUB #1 will increase 2010 and 2011 statewide total property taxes $116.5 million by allowing the limit on school corporation expenditures from the capital projects fund for utility services and property and casualty insurance to increase from 3.5% to 6% of the 2005 school formula revenue. BAUB #1, which is authored by State Senator Ron Alting (Lafayette), will increase homestead property taxes $35.4 million statewide.

The state has assumed MOST school general fund expenditures, while school capital project funds get their revenue from property taxes. There has been a LOOPHOLE the past several years where school capital project funds are used to help pay for the school general fund expenditures of utility services and property and casualty insurance. BAUB #1 will make this property tax LOOPHOLE bigger.

Instead of increasing the LOOPHOLE limit, school corporations should be encouraged to find more efficient ways of handling their general fund expenditures such as insurance pools for purchasing property and casualty insurance. ALSO, allowing BAUB #1 to pass would encourage school corporations to further abuse the integrity of their capital project funds by trying to include additional general fund expenses such as maintenance and health insurance expenses.

Informed Watchdogs must insist that their General Assembly public servants oppose the property tax abuse in BAUB #1.

Watchdog Indiana is a non-profit, non-connected, and non-party advocate for good government that focuses on the state and local tax burden of Hoosier working families. An online community is established where Hoosiers come together voluntarily to help encourage our state and local governments better respond to the needs of working families. Watchdog Indiana was established November 14, 2001, and the Watchdog Indiana website can be found at

This is Watchdog Indiana E-mail Update #136-011610, and it was sent to 26,184 Hoosiers in 74 counties.

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Happy Trails,
Aaron Smith


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