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Eliminate Property Tax? Lawmakers Mull Cost

How High Other Taxes Would Rise Is Key Question

POSTED: 8:59 pm EDT August 1, 2007
UPDATED: 8:55 am EDT August 2, 2007

Citizen anger over skyrocketing property tax bills is making lawmakers consider ideas about eliminating the tax, a move that would force increases in other taxes to offset the lost revenue, 6News' Norman Cox reported Wednesday.

Property taxes provide Indiana schools and local governments nearly $6 billion per year. If those taxes were repealed, most or all of that money would need to be covered by increases in income taxes and/or sales taxes.


Also: Capitol WatchBlog

Eric Miller, a former gubernatorial candidate who runs the Advance America lobbying group, is pushing hard to eliminate property taxes.

"After living in your home 20, 30, 40 years, if you can't pay your property taxes, the government will take your home and sell it -- and that's not right," Miller said. "The only way to let people own their own home is to abolish property taxes."

Miller said his property-tax elimination plan calls for increasing the state income tax from 3.4 percent to 4.4 percent and raising the state sales tax from 6 percent to 8 percent.

Miller said respected economists have said his plan will work.

State Sen. Luke Kenley, a Noblesville Republican who is chairing a commission on what to do about property taxes, said he would listen to Miller's plan. But he said he believes one of the other taxes -- sales or income -- would have to be increased even more.

Kenley said that either the income tax would need to rise to 8.4 percent, or the sales tax would need to rise to 12 percent.

Lawmakers became increasingly willing this year to consider a property tax repeal. Property taxes on homeowners were expected to increase an average of 24 percent statewide this year, but residents in parts of Marion County and other counties saw much higher increases.

Earlier this year, lawmakers approved rebates that were projected to lower the average increase to about 7.7 percent, but the rebates won't be sent until after this year's second installment of property tax bills are mailed in the fall.

Reacting to the large bills, Gov. Mitch Daniels last month ordered new property assessments in Marion County and a few other counties, saying the most recent assessments there put an unfair portion of the tax burden on homeowners and not enough on commercial and industrial properties. Homeowners in those counties were told they could pay what they paid last year and make up the difference -- either up or down -- after the new assessments are finished.

Property Tax Advice Offered Thursday Night

For the third time in two weeks, lawyers and other experts will take calls from people with property tax questions on Thursday evening.

People can call the property tax phone bank, 317-327-7777, from 6 to 8 p.m. Thursday. Among other things, the experts will give advice to homeowners looking to appeal their bills.


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