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Indiana Property Tax Cap Amendment, Public Question 1 (2010)

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The Indiana Property Tax Cap Amendment was on the November 2, 2010 ballot in the state of Indiana as a legislatively-referred constitutional amendment, where it was approved. Approveda The measure, if enacted by a simple majority of Indiana voters, would add property tax caps to the Indiana Constitution. Senators Patricia L. Miller, Luke Kenley and Brandt Hershman introduced the measure.[1]

Election results

See also: 2010 ballot measure election results

Official results of the measure follow:

Public Question 1 (Property Tax Cap)
ResultVotesPercentage
Approveda Yes 1,124,413 72%
No438,68728%

Results via the Indiana Elections Division.

Text of measure

The question read as follows:

SHALL PROPERTY TAXES BE LIMITED FOR ALL CLASSES OF PROPERTY by amending the Constitution of the State of Indiana to do the following: (1) Limit a taxpayer's annual property tax bill to the following percentages of gross assessed value: (A) 1% for an owner-occupied primary residence (homestead); (B) 2% for residential property, other than an owner-occupied primary residence, including apartment; (C) 2% for agricultural land; (D) 3% for other real property; and (E) 3% for personal property. The above percentages exclude any property taxes imposed after being approved by the voters in a referendum. (2) Specify that the General Assembly may grant a property tax exemption in the form of a deduction or credit and exempt a mobile home used as a primary residence to the same extent as real property?[2]

Summary

The summary of the measure read:[1]

"Circuit breakers and other property tax matters. Requires, for property taxes first due and payable in 2012 and thereafter, the general assembly to limit a taxpayer's property tax liability as follows: (1) A taxpayer's property tax liability on homestead property may not exceed 1% of the gross assessed value of the homestead property. (2) A taxpayer's property tax liability on other residential property may not exceed 2% of the gross assessed value of the other residential property. (3) A taxpayer's property tax liability on agricultural land may not exceed 2% of the gross assessed value of the property that is the basis for the determination of the agricultural land. (4) A taxpayer's property tax liability on other real property may not exceed 3% of the gross assessed value of the other real property. (5) A taxpayer's property tax liability on personal property may not exceed 3% of the gross assessed value of the taxpayer's personal property that is the basis for the determination of property taxes within a particular taxing district. Specifies that property taxes imposed after being approved by the voters in a referendum shall not be considered for purposes of calculating the limits to property tax liability under these provisions. Provides that in the case of a county for which the general assembly determines in 2008 that limits to property tax liability are expected to reduce in 2010 the aggregate property tax revenue that would otherwise be collected by all units and school corporations in the county by at least 20%, the general assembly may provide that property taxes imposed in the county to pay debt service or make lease payments for bonds or leases issued or entered into before July 1, 2008, shall not be considered for purposes of calculating the limits to property tax."

Constitutional changes

Indiana Property Tax Cap Amendment, constitutional changes

The measure was proposed to amend Article 10, Section 1 of the Indiana Constitution.[1]

Support

Supporters

  • Governor of Indiana Mitch Daniels was a supporter of the measure, stating that the proposal would lead to a 2 percent increase in net household income as well as creating 97,000 new jobs. Daniels cited a Ball State University study that backed these assessments.[3]
  • Lieutenant Governor of Indiana Becky Skillman supported the measure, stating that adding tax caps to the Indiana Constitution "assures families their property taxes will be low and predictable forever."[4]
  • State Representative Bruce Borders claimed about the tax caps, "If we don't pass these it will be then 20 years from now, 30 years from now. We'll always be promising protection that doesn't exist. And so we have this once in a lifetime opportunity and I absolutely mean that. This one time in a lifetime opportunity for you to have protection."[5]
  • Senator David Long stated, "The property tax is unarguably the most unfair and unpopular tax in America. This is why permanent tax caps are so important, because of the security and stability they bring.”[6]
  • George R. Postletheweight, CEO of Evansville Area Association of Realtors and Bill Pedtke, Executive Director of the Southwestern Indiana Builder's Association, wrote in an editorial, "As citizens of this great state, we have the opportunity to vote to finally cap property taxes. By taking a stand, we can amend the new tax caps into the state constitution, thereby ending the tax tug-of-war that has cost us all. Let's force legislators to keep their promise of tax cuts, and at the same time take a stand for our homes and our community."[7]

Arguments

  • Aaron Smith of Watchdog Indiana stated, "The constitutional amendment will make our home owner property tax deductions immune from legal challenge and a fair and affordable tax burden include particularly property taxes are important to working families."[8]
  • Andrea Neal, a teacher at St. Richard's Episcopal School in Indianapolis and adjunct scholar with the Indiana Policy Review Foundation, stated in a column published by the Indianapolis Star, citing a report done about the measure, "On Election Day, voters have the chance to make the caps permanent. Even with the sales tax increase, Ball State University's Center for Business and Economic Research has found the caps will have "a positive effect on the Indiana economy in the long run increasing employment, income and investment.""[9]

Campaigning and rallies

  • In Beech Grove, Indiana, the campaign for the measure began their effort at the home of Randy and Denise Douglas, whose property tax bill was reduced by $300 by temporary caps in the state. According to Indiana Association of Realtors member Paul Wyman at the rally, "Let's provide a certainty to the American dream of home ownership and let's send a message to the rest of the United States of America that Indiana is an awesome place to own a home and to live."[10]

Opposition

Opponents

  • The coalition in opposition of the measure included: The Urban Schools Association, the Indiana Association of Counties, and the Indiana PTA.[11]
  • Senator James Lewis and Representative David Cheatham stated they would vote against the measure during the November election, citing that the measure was unconstitutional.[12]
  • Indiana Chamber of Commerce President Kevin Brinegar stated his and the chamber's opposition to the measure during an address to about 30 local business owners at Indiana State University. Brinegar stated about the measure, "Twenty-five, 50, 100 years from now, we’ll look back on this and realize what a mistake it was...It’s going to be the law of the land."[13]
  • Bill Waltz, vice president of taxation and public finance for the Chamber of Commerce, stated that although the organization had no plans to campaign against the measure, "We'll continue to have concerns about their impact and how they will impact our business climate and situation," adding that the measure does not encourage business since companies would have to pay three times as more in taxes as homeowners.[14]
  • Indiana Farm Bureau was an opponent of the measure, stating that they object to having different tax rates for different categories of property in the state. Bob Kraft, director of state government relations for the Indiana Farm Bureau, stated a concern that the proposed taxes would put a burden on people who benefit the least from services provided by the state.
  • Susan Akers, executive director of the Indiana Library Federation, stated, “It sounds like such a good idea and it’s been easy for politicians to say, ‘Look what I’ve done for you.' But it’s our job to say, ‘This isn’t helpful to Hoosiers; it’s harmful.’”[11]
  • Mary Ferris of the Wayne County Farm Bureau wrote in a letter that the organization was against the measure for three reasons; the tax caps were deceptive, they were unconstitutional at this point, that the consequences of tax caps were not fully understood.[15]

Arguments

Arguments that were made against the measure included:

  • A vote for the measure would have negative impacts on communities in the state that are struggling to provide basic services.[11]
  • According to the Indiana Chamber of Commerce, the referendum set different property tax limits on different categories of property. Residential taxes would be capped at 1 percent, rental property in residential areas would be capped at 2 percent and taxes for business would be capped at 3 percent. As a result, the Chamber of Commerce gave the example that it wouldn't be far-fetched that a $200,000 residence would have a lower yearly property tax bill than a $100,000 business.
  • In a letter to the editor, published in the Indianapolis Star, the author of the letter argued that public services were more significant issues, and that taxes would help fund those services. The letter stated, "Because Indiana might someday want to again fund public services through property tax revenue, I urge you to vote against putting the property tax law into our state constitution...I don't want to pay a lot in taxes, but I definitely want police officers to be available quickly if needed, my future kids to be able to attend well-funded community schools featuring certified teachers, and firefighters to respond quickly in an emergency."[16]

Campaigning, rallies and events

  • The coalition in opposition to the measure handed out buttons, fliers and other campaign material that informed voters of the alleged possible negative impacts of the proposal. The campaign described the measure as unnecessary because tax caps were already state law. Chuck Little of the Urban Schools Association, stated, "We know its passage is almost a done deal. But we still think people need to go into the voting booth with their eyes opened on this issue.”[11]

Media editorial positions

See also Endorsements of Indiana ballot measures, 2010

Support

  • The Indianapolis Star was in favor of capping taxes, as an editorial stated, "Reining in spending should be a first order of business for all levels of government. But where government must be financed, far better that it be by way of a diverse source of taxes and fees accompanied by a diminished reliance on the property tax for local finance. Property tax caps will help facilitate that change." A later editorial by the newspaper stated, .".. sometimes a constitutional fix is necessary to ensure fairness and stability, and to resolve long-standing problems that defy purely legislative solutions. The proposed referendum would accomplish those crucial goals. Voters should approve it on Nov. 2."[17][18]

Opposition

  • The South Bend Tribune was against the amendment, as they stated in an editorial, "We don't believe that tax caps belong in the state constitution. We say yes to meaningful tax reform in Indiana; unfortunately enshrining the 1, 2, 3 tax caps into the state constitution doesn't accomplish this goal. In fact it may make it harder. Vote no on the property tax cap referendum."[19]
  • The Journal-Gazette was against the measure, writing, "Tax-cap limits already are in effect. The push to write them in the constitution comes from the realization that, long term, Hoosiers won't like the effects.But even if they demand repeal, it will require the approval of legislators in two separately elected sessions and another statewide vote – most likely another five years. In the meantime, the quality of Indiana schools, libraries and parks may well decline or require increases in other taxes and fees to preserve. Services that residents have come to expect and depend upon could well diminish. The effects of the law demand more scrutiny than they have so far been allowed. The answer to Public Question No. 1 should be "no."[20]

Polls

See also: Polls, 2010 ballot measures
  • WISH-TV released a poll on October 7, 2010 that showed support for the measure. The poll was conducted by the polling firm EPIC-MRA, and had a plus or minus 4.4 percent margin of error.[21]
  • In a poll conducted by the Evansville Courier Press, there was a strong amount of support of the amendment. The poll was currently being conducted, so results may change until completion.
  • A survey performed by Ball State University also showed strong support for the measure. The survey was done in December 2009 with the results revealed on December 15. The Bowen Center for Public Affairs at the university teamed up with the Princeton Survey Research Associates to survey 600 Indiana residents.
  • Another survey conducted by WSBT-TV.com showed strong support for the measure by those who took the poll.[22]

Results of the polls were as follows:[23][24]

Legend

     Position is ahead and at or over 50%     Position is ahead or tied, but under 50%

Date of Poll Pollster In favor Opposed Undecided Number polled
October 2010 WSBT-TV 57% 21% 22% N/A
Sept. 29-Oct. 1 EPIC-MRA 62% 24% 14% 500
Jan. 2010 Evansville Courier Press 57% 24% 18% 279
Dec. 2009 Ball State University-Muncie 64% 22% 14% 600

Path to the ballot

The Indiana House of Representatives approved the measure on January 11, 2010. The Indiana State Senate approved the measure on January 19, 2010 on at 35-15 vote.[1][25][26]

The Indiana Constitution is one of the most difficult in the country to amend, requiring that a proposed amendment be approved by two successive sessions of the Indiana State Legislature with an intervening election. The tax cap amendment was first passed through the 2008 session of the legislature.[27]

The motion to refer the proposed property tax cap amendment to the Indiana ballot was sponsored by Republican state senators Luke Kenley, Patricia L. Miller and Brandt Hershman.

Similar measures

2010

See also

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Additional reading

References

  1. 1.0 1.1 1.2 1.3 Text of Senate Joint Resolution 1
  2. Floyd County, "OFFICIAL BALLOT GENERAL ELECTION FLOYD COUNTY, INDIANA NOVEMBER 2, 2010"
  3. NWI.com, "Hoosiers better off because of fiscal prudence, Daniels says," August 19, 2010
  4. Evansville Courier Press, "Lt. Gov. Becky Skillman: Put property tax caps in Indiana Constitution," October 1, 2010
  5. WTHITV.com, "Property tax caps are a catch 22," October 1, 2010
  6. Journal Gazette, "Rally touts tax cap amendment," October 12, 2010
  7. Tristate-Media, "Property tax caps will be beneficial to homeowners," October 22, 2010
  8. My Wabash Valley, "Property Tax Cap Discussion," accessed August 13, 2010
  9. Indianapolis Star, "Tax caps get the blame but not the credit," September 28, 2010
  10. WishTV8, "Campaign for permanent property tax caps," September 15, 2010
  11. 11.0 11.1 11.2 11.3 Herald Bulletin, "Opponents of amendment to put tax caps in constitution face uphill battle," October 6, 2010
  12. The Madison Courier, "Cheatham, Lewis discuss legislation at final Third House," March 22, 2010
  13. TribStar.com, "State Chamber chief: Tax caps likely to pass," July 7, 2010
  14. Evansville Courier & Press, "Tax cap opponents have tough sell | POLL," January 31, 2010
  15. Pal-Item.com, "Local Farm Bureau leader urges 'no' vote on tax caps amendment," October 27, 2010
  16. Indianapolis Star, "We're not ready for permanent tax caps," August 30, 2010
  17. Indianapolis Star, "It's time for tax caps: Vote yes to ballot question," October 16, 2010
  18. Pal-item.com, "Tax caps to facilitate needed changes," March 2, 2010
  19. South Bend Tribune, "'No' on tax cap referendum," October 24, 2010
  20. Journal-Gazette, "Vote ‘no' on tax caps," October 24, 2010
  21. Chicago Tribune, "Poll: 62 percent favor property tax cap amendment," October 7, 2010
  22. South Bend Tribune, "Poll sees property tax cap support," October 28, 2010
  23. Evansville Courier Press, "Poll: What is your opinion of the proposed property tax caps in Indiana?," January 31, 2010
  24. Building Indiana, "Survey: Hoosiers Favor Property Tax Cap," December 15, 2010
  25. South Bend, "Indiana property tax measure clears hurdle in House," January 12, 2009
  26. Indiana General Assembly, "Bill Watch"
  27. "Tax Cap Amendment Passes Senate 35-15"
  28. Journal Gazette, "‘Evil triplets’ no worse than Hoosier tax caps," May 25, 2010