Published: March 27, 2008 11:10 am            

GOP big guns visit New Albany, defend property tax relief

SO YOU KNOWPart of the property tax reform package removes costs of four child-welfare levies, juvenile incarceration and health care for the indigent from the county level.



Two high-ranking GOP state representatives were in New Albany on Wednesday to discuss the newly passed property-tax reform package.

House Republican Leader Brian Bosma joined Rep. Eric Turner in the third floor Assembly Room of the City/County Building as part of a state tour of cities that has included Terra Haute, Logansport and Lafayette.

The two were in Evansville on Wednesday before making the drive to New Albany. Their message has been one of support for the property-tax relief package, which will include $620 million in aid for 2008.

“The burden of property taxes was becoming unbearable for homeowners,” Turner said.

Turner said the goal of legislators in favor of the package was to make taxes less formidable for property owners, while at the same time making the levies predictable.

“Over and over, people said to us that they would go to their mailbox with sweaty palms, not knowing how much there property taxes were going to go up,” Turner said.

Bosma called the reform historic, saying there had not been such an effort in Indiana since the 1973 tax freeze.

He said homeowners will save an average of 25 percent this year on property taxes. Floyd County property owners will save nearly 31 percent on average, according to Bosma.

By 2010, the tax circuit breaker will be at 1 percent for residential property owners. The median homeowner’s cap would be $1,207.

The state sales tax will be raised to seven percent to provide funds to replace property-tax dollars. Bosma said residents around Indiana have told him they prefer the sales tax increase in exchange for reductions in property taxes.

Immediate tax relief was one of four goals Bosma said GOP lawmakers had outlined for the latest legislative session. Other aims were to make caps permanent, empower local taxpayers and to place limits on local government spending.

The cuts to local government funding have caused concern for John Rosenbarger, director of public works for New Albany.

“Does the state plan on taking over local government?” Rosenbarger asked.

He questioned the representatives on how cities would fund needs, such as additional public safety officers, with spending limits in place.

Bosma said there remains the local option of income tax, which would have to be approved on a countywide basis. He added that all bodies receiving property-tax funds would have to look for new answers because of the relief package that will take full effect within two years.

“Schools, cities, towns, counties in 2010 will all have to seek creative solutions to the challenges that face us all today, as will the state,” Bosma said.

Some of the lost tax revenue could result in employment cuts at the city and county level. During a recent Greater Clark County Schools board meeting, members said they would be looking at cutting back on staff because of the property-tax reductions.

But Bosma said the good would hopefully outweigh the bad.

Bosma cited an article written by Larry DeBoer, professor of agriculture economics at Purdue University, who stated a homeowner would save $415 a year based on average property-tax rates.

DeBoer also states in his article that renters making a median income will see an increase of expenses on average of $139 a year, because of the higher sales tax.

Rosenbarger asked about state funding for street projects and improvements. Bosma said he will suggest a summer study on local road funding. He said the issue has been brought up many times during his trips around the state and the needs should be researched.

“I don’t have an answer for you as far as a solution, but we must find one,” Bosma said.

        

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