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Local Concern: Kenley Cautious In Light Of New Circuit Breaker Data

Taxman Not all that concerned about how the Guv's tax plan will affect you at the local level? Consider the new numbers and some lingering doubts from a Republican who knows what he's talking about. The Fort Wayne Journal Gazette's Niki Kelly reports:

"Newly revised fiscal estimates and testimony from local governments and schools on the effect of a 1 percent circuit breaker is causing some key lawmakers to take a hard look at that part of Gov. Mitch Daniels’ property tax plan.

"'It sure did make it feel kind of tough today,' Sen. Luke Kenley, R-Noblesville, said after hearing three hours of testimony on the tax cap Tuesday in his Senate Tax and Fiscal Policy Committee.

"A circuit breaker is a protection that limits homeowners' property tax bills to a certain percentage of the property’s assessed value. But it doesn't mean tax bills can't rise in the future. If the value of a home goes up, so can the tax bill.

"The Indiana General Assembly passed a circuit breaker into law in 2006 but then tweaked it substantially in 2007 to mitigate most of the effects after complaints from local officials.

"The current circuit breaker of 2 percent for homesteads goes into effect in 2008. All other properties will have a 3 percent circuit breaker starting in 2010.

"The non-partisan Legislative Services Agency estimated this year that the cost of the current circuit breaker to schools and local governments would be about $100 million when fully implemented in 2010.

"But after receiving additional county data over the summer, the Legislative Services Agency announced this week a revised cost of $380 million.

"'Going from $100 million to $380 million throws a pretty big load of caution out there,' Kenley said of the surprising revisions. 'You better know where you're going before you implement some of these things. That is why we … had (those circuit breakers) come into play down the road so we could hopefully understand where we were going.

"'Before we got to the train wreck we at least wanted to know where we would be in participating in one.'

"And if the legislature follows Daniels' plan – homestead cap at 1 percent; rental property at 2 percent and all other property at 3 percent – the shortfall for schools and local government in 2010 jumps to $748 million.

"Daniels' staff has defended the proposal, focusing on the savings for taxpayers. But it is money local governments and schools will have to cut from their budgets. Or they could raise local income taxes to cover the shortfall."

The Guv's strategy? Pass the buck. Blame local government. Call it a day.

Comments

Is there some kind of link for each County in the State to determine what the fiscal impact of the Gov.'s proposal would be?

No one in Marion County should be worried because Greg Ballard will fix everything for us. He's our savior from all taxes. Yeaaah!!!

This is Mitch's MO.

He passed the buck when he was OMB Director.

He's passing the buck as Governor.

God forbid he's ever elected to a city-level office, we'll need to create a whole new lower level of government just so he can shirk responsibility down the line.

Mitch Daniels, [Governor / then the White House budget director], had said the [war/costs to local governments] would be an "affordable endeavor" and rejected an estimate by the [chief White House economic adviser /Legislative Service Agency] that the [war/property tax plan] would cost [between $100 billion and $200 billion / $100 million] as "very, very high."

Are we really supposed to believe this guy about anything?

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