October 8, 2024
Property

McCormick releases proposal to address property taxes • Indiana Capital Chronicle


Indiana’s Democratic nominee for governor unveiled her plan Thursday for addressing rising property tax plans, including fiscal impact and estimated savings for taxpayers. 

Jennifer McCormick’s campaign team published a fact sheet Thursday morning, touting the plan as a way to provide “targeted relief to those who need it most without cutting essential police, fire, and school services to Hoosiers.”

“Many Hoosiers are struggling to keep up with rising property taxes driven by increased assessed values. Senior citizens, those on fixed incomes, veterans, and working families deserve relief,” McCormick said in the release. “Our commonsense plan helps those feeling the pain of property taxes without raiding critical funding that supports our local communities, schools, libraries, police, and fire departments.”

Similar proposals released by her Republican and Libertarian opponents have been criticized for not providing fiscal estimates or naming alternative funding sources for key local services like public safety. McCormick largely relied on lawmaker proposals previously vetted by the General Assembly’s Legislative Services Agencies, which calculates a fiscal impact for each bill filed by legislators.

McCormick’s plan includes capping property tax increases at 10%, combined with increasing the homeowner property tax deduction by 40%; increasing personal exemptions by 150%; and increasing the renters tax deduction by 33%. 

According to an analysis by the Association of Indiana Counties and Policy Analytics, the gross assessed value of homes jumped 16.5% on average between 2022 and 2023 and property tax bills increased by 18.2% on average.

Plan details

Capping increases at 10% could save homeowners roughly $23 million in the 2024 calendar year or $7 million in the subsequent year, according to the fiscal calculations for a 2022 bill filed by Republican Sen. Brian Buchanan, of Lebanon. Schools, libraries, counties and towns would lose that funding, however. 

A 40% increase in the homeowner property tax dedication, from $2,500 to $3,500, would save an estimated $8.8 million, according to LSA, costing the state between $358 to 4360 million for the 2025 fiscal year. 

For seniors, individuals making up to $40,000 and households making up to $50,000 with assessed values up to $300,000 would qualify — an increase from $30,000 and $40,000, respectively, for property up to $200,000 currently in statute. LSA’s estimated cost for this is between $15 million and $22 million and would impact local units of government.

For disabled veterans — which includes Hoosiers with total disabilities or veterans over the age of 62 with at least a 10% disability — the cap on assessed values moves from $240,000 to $350,000. Local governments would lose the estimated $6.8 million that these taxpayers would save.

The 150% increase in exemptions on personal income, on the other hand, would raise the limit from $1,000 to $2,500. Taxpayers would save an estimated $500 million while the state would lose roughly $333 million and local government units would lose $173 million.

Lastly, increasing the renters deduction from $3,000 annually to $4,000 annually could cost an estimated $28 million in state and local revenues. 

Comparison to opponents

U.S. Sen. Mike Braun, McCormick’s Republican opponent, released his property tax proposal without any fiscal analysis and adjusted some aspects after promising a reset to 2021 levels — something not included in the original plan. 

Braun’s plan points to the state’s homeowner deduction, which is designed to reduce the taxable value of a home but “has not kept pace with rising home values,” according to the campaign. 

Homeowners with an assessed value of over $125,000 would be allowed to deduct 60% of their home’s assessed value from their tax bill, while those below that threshold would take the standard deduction of $48,000 in addition to a 60% supplemental deduction. 

Lieutenant governor candidates debate water policy, property tax

Additionally, future tax increases would be capped annually to 2% for senior, low-income Hoosiers and families with children under the age of 18. All other homeowners would be capped annually at 3%. 

The Braun campaign said the average Hoosier homeowner would have saved $1,000 over the last five years with this tax cap. Braun’s plan also included revisions to referendum ballot language, among other provisions.  

Meanwhile, the property taxes plan from Libertarian Donald Rainwater would cap taxes based on purchase price. 

McCormick criticized Braun for his plan that only impacted local coffers, as opposed to the state budget — pointing to his 2015 vote in the General Assembly for a failed bill that would have made several tax code changes

“Mike Braun’s plan is unserious, reckless, and fiscally irresponsible. Leave it to a D.C. politician like Mike Braun to promise tax cuts that won’t come out of the state budget or impact state spending,” McCormick in said in a news release. “The state can provide property tax relief now for those who need it while finding a long term solution to address local funding needs. It is simply a question of budget priorities. As a State Representative, Mike Braun voted for higher property taxes when he had the chance to put Hoosiers first. I will always put Hoosiers first and support our local communities.”

This story will be updated.

GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *