2008 Indiana General Assembly: Challenges = Opportunity for Change
Coming off a summer of sizzling property tax bills followed by several surprise election results in November, the Indiana General Assembly reconvened last Tuesday for the 2008 Legislative Session. Prior to convening last week, the legislature held several committee hearings in December. A flurry of activity erupted last week at the Statehouse as hundreds of bills were filed and committees got right to work approving several bills on the first day.
As the voice for the central Indiana business sector, the Greater Indianapolis Chamber of Commerce remains committed to lessening government’s reliance on property taxes while ensuring municipalities have solid fiscal foundations from which to address current community needs and confront future financial challenges.
The Indianapolis Chamber strongly believes the General Assembly has an opportunity to finally address the underlying causes of high property taxes—too many unnecessary, overlapping layers of local government.
While the state as a whole must work together for long-term property tax reform, Marion County is already positioned to move ahead by building upon the UniGov foundation laid out nearly 40 years ago by then-Mayor Richard Lugar
The Chamber will continue to work with our legislative representatives to emphasize the importance of local government reform as outlined in our 2008 Legislative Agenda.
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LOCAL GOVERNMENT AND FISCAL POLICY
Issue: Marion County Government Modernization (SB 0280)
What it means to you: Increased Efficiency, Accountability and Transparency in local government. Authored by Sen. Jim Merritt (R – Indianapolis), SB280 combines the remaining Marion County township and airport fire departments with Indianapolis Fire Department, creating a single, county-wide fire department while saving an estimated $15 million a year. SB280 also puts control of IMPD under the Mayor, eliminates township assessors in Marion County, and permits the Indianapolis/Marion County City-County Council to eliminate township trustees in Marion County by 2011.
What happened last week: Sen. Merritt, who held a joint press conference with Sen. Theresa Lubbers (R – Indianapolis) and Mayor Greg Ballard, filed the bill. Mayor Ballard has expressed his support for the bill.
What's next? As in past years, expect a tough fight from township officials and partisan interests, but given the tax crisis of this past summer, some past opponents may reconsider previous votes.
Issue: Marion County Fiscal Management (SB 0260)
What it means to you: SB260 combines the duties of the Marion County Treasurer, Auditor and Controller and establishes the board of finance and management for Marion County, promoting better coordination and oversight of municipal revenues and expenditures.
What happened last week: Sen. Jim Merritt filed the bill and it was assigned to the Senate Local Government Committee.
What's next? Expect this bill to be met with resistance as it is part of Sen. Merritt’s larger plan for consolidation outlined in SB 280.
Issue: Property Tax Reform (HB 1001)
What it means to you: HB1001 contains the elements for property tax reform as proposed by Governor Mitch Daniels, including: plans to limit property taxes to 1 percent of assessed valuation for homesteads, 2 percent for rental properties and 3 percent for commercial/industrial properties; shifting payments for child welfare and school general funds from counties to the state; limiting the growth of municipal budgets to the growth of county income levels, consolidating township assessors into a single appointed county assessor; requiring referenda on debt issued by a county that exceeds 1 percent of the county budget and increases the state sales tax to 7 percent.
What happened last week: HB1001 has been heard several times by the House Ways and Means Committee since December. Last week, the Ways and Means Committee traveled to Ft. Wayne and South Bend for public vetting of the bill.
What's next? Expect significant changes to be made to this bill during the legislative process as a result of pressures from local governments and school corporations who see this bill as having a negative effect on their already strained budgets.
Issue: Elimination of Township Assessors (SB 0016)
What it means to you: SB16 seeks to transfer the duties and responsibilities of township assessors to a county assessor. By eliminating township assessors, SB16 will create more accountable, transparent and uniform assessments statewide.
What happened last week: The bill was heard in the Senate Local Government Committee, where it was met with resistance from many township assessors present. Indianapolis Chamber Senior Business Advocacy Manager Mark Fisher testified in support of SB16, which ultimately passed out of committee 5-4.
What's next? As a major component of several tax reform proposals, expect this bill to garner both bipartisan support and bipartisan opposition as it moves through the legislative process.
Issue: Limits on Redevelopment Commission and TIFs (SB 0017)
What it means to you: SB17 limits the amount of time placed on repayments of debt with respect to Tax Increment Finance projects (TIFs) to 25 years. The bill also creates greater oversight by local fiscal bodies on debt issued for economic and redevelopment projects and restricts the expansion of TIF districts.
What happened last week: The bill was heard in committee and amended to include the limits on expansion of TIF districts.
What's next: The Senate Tax and Fiscal Policy Committee is scheduled to hear the bill Jan. 18. Expect a lot of debate as it moves through the process, with a final version to be unknown until the last days of session.
Issue: Limitations on Government Debt (SB 0018)
What it means to you: SB18 limits the amount of debt issued by local taxing units, while restricting the amount of time placed on repayments of debt to 25 years for Tax Increment Finance projects (TIFs) and 20 years for all other debt. SB18 also limits the authority of the taxing unit to utilize revenue in excess of anticipated amounts or as a result of re-issuance of bonds. The bill also requires referenda for debt issued for major capital projects, with some exceptions for school districts that have an annual growth rate of over 4 percent. The bill could have serious consequences for economic development projects around the state as well as negatively impacting school districts that may not be growing at 4 percent but nonetheless require improvements or additions to their facilities.
What happened last week: The bill was heard in the Senate Tax and Financing Policy Committee on the first day of the legislative session where it was amended to include the referenda language.
What's next? Expect the bill to garner considerable support as it moves to the full Senate for a vote. If it is passed through the full Senate unchanged, expect a tough fight in the House over the referenda language.
Issue: Child Welfare Levies (SB 0001)
What it means to you: SB1 shifts the burden of funding for Child Welfare, a state administered program, from counties to the state. As the fasted growing portion of the Marion County budget, removing this levy will provide immediate property tax relief to Marion County and counties across the state.
What happened last week: The bill passed out of the Senate Appropriations Committee 8-1.
What's next? As a major component of several property tax reform plans, expect this issue to garner bi-partisan support as it makes it way through the legislative process.
EDUCATION AND WORKFORCE DEVELOPMENT
Issue: Moving School Board Elections from the Primary to the General Election (SB 0002)
What it means to you: Greater transparency and accountability at the school board level of local government and therefore potentially a greater voter turnout. The bill requires that elected school board members must stand for election at general elections and repeals obsolete statutes.
What happened last week: Authored by Sen. Teresa Lubbers (R-Indianapolis), Sen. Jim Merritt (R-Indianapolis), and Sen. Vaneta Becker (R-Evansville) the bill was introduced and assigned to the Senate committee on Local Government and Elections.
What’s next? The bill will be heard in Senate committee on Local Government and Elections 1 p.m., Wednesday, Jan. 16 in the Senate Chamber. The Greater Indianapolis Chamber of Commerce will testify in support of the bill.
Issue: Elected School Boards (HB1021)
What it means to you: Greater efficiency and consistency in local government at the school board level. The bill requires members of the governing body of a school corporation be elected and repeals statutes providing for the option of appointment of members of a governing body. The bill also repeals superseded statutes relating to election of members of a governing body.
What happened last week: Authored by Rep. Tim Neese (R – Elkhart), the bill was introduced and assigned to the House Committee on Elections and Apportionment.
What’s next? Committee Chair, Rep. Matt Pierce (D – Bloomington), must schedule the bill for a committee hearing.
Greater Indianapolis Chamber of Commerce 2008 Legislative Agenda
Legislative Commission on State Tax & Financing Policy Final Report
Kernan-Shepherd Commission on Local Government Reform Final Report
