Wednesday, February 13, 2008


Referendums on all major local government building projects, including projects for growing school districts, will most likely be included in the property tax reform package now being considered in the Indiana Senate.

Senator Luke Kenley, Chairman of the Senate Tax and Fiscal Policy Committee, has said the Senate will make alot of changes to the legislation passed by the House. Kenley also said a key change will be to restore the referendum proposal giving voters the final okay on any new major building projects including growing school districts.

Lobbyists for teachers and schools testified for five hours on Tuesday, February 6, in support of the amendment exempting all classroom-related projects saying the existing petition and remonstrance system is adequate and all that is needed. Kenley said the public has lost confidence in the government's ability to make these kinds of decisions, and referendums are needed to give the voters a direct voice in municipal building projects.

The Senate will continue debating changes to House Bill 1001 before Kenley and his committee vote on February 19. The bill will then move to the full Senate for debate. All changes made by the Senate must be approved by the House. If they cannot agree, the bill will move to a joint House-Senate committee who must then hammer out a final version before the legislative deadline of March 14.

Other changes the House made to House Bill 1001 include increasing the earning income tax credit for the working poor from 6 percent to 9 percent and doubling the renter's deduction on state income taxes from $2,500 to $5,000. It is unlikely the Senate will keep the earned income tax credit increase in the current legislation. Kenley and Senator Robert Meeks, Chairman of the Senate Appropriations Committee, both feel the earned income tax credit will have to wait until next year when the new state budget is crafted. Part of the reason is the state fiscal position is not very good at the moment. Tax collections have been slumping, and the state has taken in $43 million less this fiscal year than was expected. The Senate will continue to look at the renter's deducation because Kenley feels help for renters is tied to property taxes.