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House Proposes Retroactive Property Tax Caps

March 23, 2009

The Indiana House today hit fast forward on property tax caps that were supposed to be phased in over several years. Under a bill approved last year, property tax caps are supposed to scale back gradually from their current rate to one percent for homeowners, two percent for rental properties, and three percent for businesses. Today’s change would make those final rates apply retroactive to January of this year. Amendment author, Representative William Crawford, a Democrat from Indianapolis, say the change, if approved by the House and then the entire General Assembly, would save about two hundred million dollars for taxpayers this year.

“Keeping their money in their pocket is something that I think taxpayers will appreciate. And it’s not an opportunity for us to play games. What we’re doing is accelerating a process to keep it going.”

House Minority Leader, Republican Brian Bosma of Indianapolis is one of the 85 representatives who voted in favor of the bill. But he also dismissed the change, saying it would almost certainly fail to be approved by legislative leadership when they meet in the final days of the session. He says that’s because of the severe blow a retroactive rate would deal to local government budgets already in effect. Bosma calls the change an attempt by Democrats to avoid voting instead on putting property tax caps in the state constitution. Today’s vote was on second reading. One additional vote is still required in the House before the bill can head to legislative leaders for a conference committee hearing.

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