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October 6, 2010

Opponents of amendment to put tax caps in constitution face uphill battle

INDIANAPOLIS —  Groups hard hit by dwindling property tax revenues have united to keep tax caps out of the Indiana Constitution. But they admit it’s an uphill battle.

Their argument: An affirmative vote for what will appear as “Public Question No. 1” on the November ballot will have long-term negative consequences on local communities already struggling to provide basic services.  

The informational campaign is aimed at getting voters to reject what’s been a politically popular idea. That is, to amend the state constitution to make permanent the property tax caps that were put into law by the Indiana Legislature two years ago.

The caps have saved Indiana homeowners millions of dollars but also resulted in cuts to police, fire, library and other local services dependent on property tax revenue.

“It sounds like such a good idea and it’s been easy for politicians to say, ‘Look what I’ve done for you,’” said Susan Akers, executive director of the Indiana Library Federation and a coalition member. “But it’s our job to say, ‘This isn’t helpful to Hoosiers; it’s harmful.’”

The coalition in opposition to the amendment also includes the Urban Schools Association, the Indiana Association of Counties, and the Indiana PTA. They’re distributing buttons, fliers, and other material that describe the proposed constitutional amendment as unnecessary, given that the caps are already law.  

“We know its passage is almost a done deal,” said Chuck Little of the Urban Schools Association. “But we still think people need to go into the voting booth with their eyes opened on this issue.”

The caps were set into motion more than two years ago in response to a 2007 spike in property taxes that came about as the result of a court ruling. The 2008 Indiana General Assembly passed a law that limits property tax bills to 1 percent of homes’ assessed value, with a 2 percent cap on farmland and rental property and 3 percent limit on business property.

When lawmakers imposed the caps, they also raised the state sales tax, from 6 percent to 7 percent, and directed the extra revenue be used to fund schools. But sales-tax revenues have plunged with the recession. In response, Daniels ordered across-the-board budget cuts, including a $300 million cut to public education.

A campaign to get voters to cast a “No” vote to an issue that’s been championed by Gov. Mitch Daniels is a challenge, coalition members say. Two influential groups that officially oppose the amendment, the Indiana Farm Bureau and the Indiana Chamber of Commerce, have said they don’t plan to campaign against it, even though the tax caps place a larger burden on farmers and businesses.

Public sentiment seems to be on the side of tax cap advocates. The amendment was favored by 64 percent of Indiana residents surveyed in December by Ball State University’s Bowen Center for Public Affairs.

Advocates for the amendment include the Hoosier Property Tax Reform Alliance, the coalition of homeowners, business and policy groups that launched a more public campaign in mid-September with Daniels as honorary chair. They argue that placing constitutional limits on property tax bills would make it harder for state lawmakers or judges to undo the caps.

Maureen Hayden is statehouse bureau chief for CNHI’s Indiana newspapers. She can be reached at


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