“It’s Time to Finish The Job”
—State Sen. Jim Merritt (R-Indianapolis)
Commenting on the need to complete UniGov through his government modernization bill, SB280
With a full week under their belts, members of the Indiana General Assembly got straight to work crafting a “permanent fix” to the property tax dilemma.
One piece of the puzzle, modernizing local government, got a boost as the Senate Local Government Committee passed Sen. Jim Merritt’s SB280, which consolidates the Marion County fire departments as well as puts control of IMPD under the Mayor of Indianapolis. SB280 met stiff resistance from Senate Democrats and consolidation opponent, Sen. Mike Young (R-Indianapolis). Several amendments were made to make the bill more palatable and it ultimately passed out of committee 5-3.
On Jan. 15, the legislature heard Gov. Mitch Daniels lay out his plan for reform in his fourth State of the State Address. Gov. Daniels challenged the legislature to “be brave” in its quest for tax reform, while warning them that he is ready and willing to call a special session if a plan is not passed by the March 14 deadline.
LOCAL GOVERNMENT AND FISCAL POLICY
Issue: Marion County Government Modernization (SB280)
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: The bill was heard in the Senate Local Government Committee, where it passed 5-3. Several amendments were offered to make the bill more palatable, including removing the language on township assessors (this is already moving through the process in SB16).
What's next? Expect a tough fight with several amendments proposed on the Senate floor during second reading. The bill should pass out of the Senate; additional amendments are anticipated in the House of Representatives.
Issue: Marion County Fiscal Management (SB260)
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: The bill was heard in the Senate Local Government Committee, but no vote was taken.
What's next? Expect this bill to be met with resistance from Marion County Auditor (and former State Senator) Bille Breaux as well as Marion County Treasurer Mike Rodman. The fate of this bill is unsure, but a vote will be taken at the next meeting of the Local Government Committee.
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: Since December, HB1001 has been heard several times by the House Ways & Means Committee. Last week, Gov. Daniels pitched his plan in a rare personal appearance before the Ways & Means Committee. The committee spent several hours debating the plan and ultimately passed it unanimously.
What's next? With 58 amendments proposed in the House alone, significant changes will likely be made to this bill, but expect movement of the bill by week’s end.
Issue: Elimination of Township Assessors (SB16)
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 on second reading and passed.
What's next? As a major component of several tax reform proposals, expect this bill to garner bipartisan support AND opposition as it moves through the legislative process. A final Senate vote is expected this week.
Issue: Limits on Redevelopment Commission and TIFs (SB17)
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 on second reading and passed.
What's next? As a major component of several tax reform proposals, expect this bill to garner bipartisan support AND opposition as it moves through the legislative process. Expect a lot of debate on this issue as it moves through the process. The final version will not to be known until the last days of session. A final Senate vote is expected this week.
Issue: Limitations on Government Debt (SB18)
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 on second reading and passed.
What's next? Expect a lot of debate on this issue as it moves through the process. The final version will not to be known until the last days of session. A final Senate vote is expected this week.
Issue: Child Welfare Levies (SB1)
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 was heard on second reading and passed.
What's next? As a major component of several property tax reform plans, expect this issue to garner bipartisan support as it makes it way through the legislative process.
ECONOMIC GROWTH:
Issue: Sunset of Economic Development Incentives (HB1242)
What it means to you: HB1242 would sunset all state and local economic development incentives at the end of 2009. Legislative Council will have the ability to review all incentives and make determinations to keep certain incentives deemed effective. While the Chamber supports a comprehensive review of these incentives, sunsetting the incentives from the start sends a dangerous signal to the world that Indiana is no longer open for business.
What happened last week: The bill was heard in the House Commerce Committee, where it was met with bipartisan opposition.
What's next? The bill faces many challenges and possible amendments. Expect the sunset language to be removed from the bill in order to ensure advancement.
Issue: Transportation Tax Area (HB1220)
What it means to you: Further develops and expands the mass transportation opportunities in Northwest Indiana and provides Central Indiana with additional evidence of the economic benefits related to mass transportation.
What happened last week: State Rep. Chet Dobis (D-Merrillville) and US Rep. Pete Visclosky (D-IN) presented the bill to the House Ways & Means Committee, which describes the 1:1 federal match opportunities should Indiana approve the new Sales Tax Increment Finance district (STIF) for Lake and Porter Counties.
What's next? The House Ways and Means Committee will consider the bill and proposed amendments next Tuesday.
Issue: Transit Districts (HB1245)
What it means to you: Introduced by State Rep. Terri Austin (D-Anderson), this bill allows a county, city or town to establish a transit district, governed by a district commission. The transit district is able to capture part of the: 1) sales tax in the district; and 2) adjusted gross income tax withheld from the wages of employees within the district.
What happened last week: The bill was introduced last week and assigned to House Ways & Means Committee.
What's next? Assigned to the House Ways & Means Committee, the bill has not yet received a hearing date.
EDUCATION AND WORKFORCE DEVELOPMENT
Issue: Moving School Board Elections From The Primary To The General Election (SB2)
What it means to you: Greater transparency and accountability with school boards and therefore potentially greater voter turnout. The bill requires that elected school board members must stand for election at general elections.
What happened last week: Authored by Sen. Teresa Lubbers (R-Indianapolis), Sen. Jim Merritt (R-Indianapolis), and Sen. Vaneta Becker (R-Evansville) the bill passed along party lines, 6-4, out of the Senate committee on Local Government and Elections. Opposition from the Indiana Federation of Teachers and the Indiana School Boards Association was enough to sway Democratic committee members who had concerns with the school board budget cycle and that school board elections would get lost in partisan politics if moved to the General Election.
What’s next? The bill will move to second reading in the Senate this week.
Issue: Scholarship Granting Organization Tax Credit (SB248)
What it means to you: Promotes school choice and provides an incentive for individuals and businesses to donate to approved, non-profit scholarship granting organizations that serve Hoosier students. These programs would provide scholarships to qualifying low-income families and donors would receive a partial credit against their state tax liabilities based on their donations.
What happened last week: Authored by Sen. Jeff Drozda (R-Sheridan) the bill passed as amended out of Senate committee on Education and Career Development along party lines, 6-4, with the Senate majority in favor of the bill. Sen. Luke Kenley (R-Noblesville) proposed the amendment, which removed funding language from the bill. Otherwise, the bill would have to be reassigned to the Senate Committee on Appropriations and would have died in a non-budget year. The bill will need to be revisited in 2009 during the budget session in order to reinsert an appropriation.
What’s next? The bill will move to the Senate floor for second reading.
Issue: Elected School Boards (HB1021)
What it means to you: Greater efficiency and consistency for school boards. The bill requires members of the governing body of a school corporation be elected and repeals statutes providing for the appointment of members.
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? Wait to see if Committee Chair, Rep. Matt Pierce (D-Bloomington) will schedule the bill for a committee hearing.
Issue: Moving School Board Elections from the Primary to the General Election (HB1373)
What it means to you: Greater public accountability with school boards. The bill requires that school board members selected by election must be elected.
What happened last week: Authored by Rep. Bob Behning (R-Indianapolis) the bill was introduced on First Reading and assigned to the House Committee on Elections and Apportionment. The bill is not gaining traction in the House due to political opposition.
What’s next? It is unlikely Chairman Pierce will schedule the bill for a committee hearing. However, there is a greater opportunity to gain a hearing before the House Committee on Elections and Apportionment when the Senate version of the bill (SB2) comes over to the House.
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
