Bauer Tax Plan Could Violate Constitution

INDIANAPOLIS -- House Speaker Pat Bauer said Tuesday that he wants to hold down increases in property tax bills, but some said his plan may be unconstitutional.

The fight over whether to have a vote on the constitutional amendment to cap property taxes may be the biggest of the upcoming session, 6News' Norman Cox reported.

Bauer indicated during Tuesday's organization day that he may be changing his mind about allowing a vote on the constitutional amendment to cap property taxes, but would do so only as part of a larger plan to hold down assessments.

He said he is skeptical of the plan to cap taxes at 1 percent of assessed value for homeowners, 2 percent for rental and farm property and 3 percent for everything else.

Bauer said he may allow a vote, but only in conjunction with another bill capping yearly assessment increases for homeowners at 1 percent.

"Your home was worth $100,000, and then they increased your value to $130,000. So it's 1 percent of $130,000. Next year, it's 1 percent of $150,000," he said. "Your property tax can still keep going up. So we're trying to cap that increase through the assessment."

But that would seem to violate the Indiana Supreme Court ruling from more than a decade ago that threw out the old property tax system. The justices ruled then that it is unconstitutional to give residential property preferential treatment in assessments.

The attorney for the plaintiffs in that case, John Price, told 6News that Bauer's plan would seem to run afoul of the constitution.

But Bauer said he believes in his plan.

"There were people who wear black robes who make these judgments, and they change their mind," he told Cox.

Both the Democratic House and the Republican Senate are expediting committee hearings on property taxes and several other issues, such as ethics reform and banning further privatization of state services.