INDIANAPOLIS (August 24, 2007) - Governor Mitch Daniels announced two additional steps to address the state's property tax problems. At the request of counties, the governor will further extend the deadline for counties to provide dollar-for-dollar property tax relief by adopting a local option income tax. He also said the Department of Local Government Finance and Indiana Board of Tax Review will issue a joint memo to all assessors in the state that says they cannot require taxpayers to provide an appraisal to appeal a property assessment.

The new deadline for counties to take action is December 31. In July, the governor extended the deadline to October 1 (from August 1). So far, eight counties have adopted local option income taxes and others have asked for more time to consider their use. Benton County most recently took action.

"At the request of the county officials of this state, and after conferring with legislative leaders, I'm extending further the deadline for counties to exercise the option to reduce property taxes and replace them with a small increase in the local option income tax. This is the most powerful tool by far available to anyone right now. In five Indiana counties, homestead property taxes could be completely eliminated through a one percent local option income tax," said Daniels. "I know these are not easy decisions for county officials, but the chance to dramatically reduce property taxes is there and I want them to have every opportunity to consider and, I hope, undertake it as eight counties already have."

Legislation enacted earlier this year by the General Assembly gives counties the option to implement an incremental local income tax to generate budgeted revenue growth rather than raising property tax levies. The cumulative incremental tax rate may not exceed one percent.

Counties also may adopt a replacement local income tax of up to one percent to replace property tax net levies on a dollar-for-dollar basis. The relief can be applied to homesteads only, homesteads and rentals, or all property. Finally, counties can adopt the new public safety revenue tool as a means of reducing the burden on property taxpayers.

The governor provided a Legislative Services Agency analysis that shows how much property taxes could be reduced if counties adopted either a .5 percent or a one percent local option income tax (LOIT). Here is a link to a chart that shows, for each Indiana county, the reduction of property taxes for homesteads or all properties if such a LOIT is adopted: http://www.in.gov/gov/uploads/PotentialReliefLOIT.pdf

The five counties where homestead property taxes could be eliminated if a one percent local option income tax is adopted are: Harrison, Kosciusko, Orange, Switzerland and Vermillion.

Indiana law does not require taxpayers to submit appraisals to appeal their assessment. Daniels said that as he has traveled throughout the state in recent weeks, a number of homeowners have brought to his attention that assessors are requiring residents to pay for a formal appraisal to appeal their property assessment.

"As I have traveled the state, people are telling me they've been turned away by assessors who have said they must have an appraisal to appeal their home's assessment. That's contrary to state law and places an undue burden on homeowners who have legitimate concerns about their assessments," said Daniels.

Here are other actions the governor has directed in recent weeks to address property tax concerns in Indiana:

• August 23, the Department of Local Government Finance (DLGF) issued a directive to reassess commercial and industrial property in Posey County. Posey County homeowners will pay 2006 property tax amounts until the reassessment is completed. The DLGF also announced it would begin the reassessment process in Shelby County with a public hearing in early September and said that assessments in Boone, Clark, Daviess, Dearborn, Franklin, Lawrence, Marshall, Perry, Steuben, Vigo, Wayne, Wells and Whitley counties were conducted within state guidelines and no reassessment would be ordered.
• August 17, the DLGF issued a directive to reassess commercial, industrial and residential property in Gibson County.
• August 16, the DLGF said it would conduct public hearings regarding reassessment in Jay, Montgomery, Pike, Sullivan and Warren Counties. DLGF also announced that assessments in Fountain, Hancock, Henry, Huntington, Knox, Lagrange, Madison, Martin, Miami, Orange, Porter, Pulaski, Tipton, Vermillion and Warrick counties were conducted within state guidelines and no reassessment would be ordered for these counties. 
• August 13, DLGF conducted public hearings in Gibson and Posey counties to take public testimony regarding reassessment.
• August 9, DLGF said it would issue a directive order to the Delaware County assessor to revalue assessments on commercial and industrial properties only.  This was determined after conducting a public hearing a day earlier. DLGF also announced that assessments in Benton, Cass, Clay, Fayette, Howard, Jackson, Jefferson, Monroe, Newton and Vanderburgh counties were conducted within state guidelines and no reassessment would be ordered for these counties. 
• August 7, the governor, House Speaker Pat Bauer and Senate President Pro-Tem David Long issued a joint statement about their continued work on bipartisan solutions to Indiana's property tax issues, strongly urging local governments to consider adoption of local option income taxes.
• August 3, at the request of several counties, the DLGF extended the deadline until October 1 for Indiana counties to consider adopting the new public-safety revenue tool, as a means of reducing the burden of property taxes. DLGF announced that assessments in Dubois, Hamilton, Hendricks, Tippecanoe and Washington counties were conducted within state guidelines and no reassessment would be ordered for these counties. 
• August 2, DLGF issued an order for reassessment of real property in Marion County. This formalized the governor's verbal order of July 18. This also includes a freeze on tax bills for Marion County taxpayers at 2006 amounts.
• July 27, OMB Director Ryan Kitchell testified at Senator Luke Kenley's property tax commission and suggested, on behalf of Governor Daniels, that a targeted circuit breaker be used to provide relief for those homeowners hardest hit. With a circuit breaker, most bills could be limited to less than one percent of their property's value.
• July 25, the governor ordered DLGF to oversee property tax reassessments in Gibson, Posey and Delaware counties and acknowledged six counties (Brown, Jasper, Jay, Montgomery, Morgan and Pulaski) that were the first to adopt a local option income tax to offset property taxes.
• July 23, DLGF sent a letter to all counties requesting critical detailed assessment data that is past due to the state. An August 15 deadline or a plan with a timeline to deliver the data was requested.
• July 18, the governor verbally ordered a reassessment in Marion County. He also directed DLGF to contact counties that still owe the state property tax data. He also announced the creation of the Blue Ribbon Commission on Local Government Reform. This group will look at and make recommendations about how to reform and restructure local government. Former Governor Joe Kernan and Indiana Supreme Court Chief Justice Randy Shepard are co-chairs of the commission. The governor later named remaining members of the commission.
• July 14, the governor sent a letter to House and Senate leaders offering two broad proposals for targeted property tax relief. 
• July 11, Daniels extended the deadline for counties to decide whether to adopt a local option income tax to reduce local property taxes from August 1 to October 1. The DLGF began to analyze detailed property tax data for Marion County.
• July 9, the governor directed the DLGF to approve any county's application to allow homeowners to pay property taxes in installments and to extend bill due dates; ordered the Indiana Bond Bank to facilitate short-term financing by local governments that need cash while awaiting installments; ordered DLGF to review disparity between residential and commercial reassessment in many counties; and ordered DLGF to notify counties that upcoming budgets that spend above the rate of inflation will be rejected until spending is under control.

Audio from the announcement can be found here: http://www.in.gov/gov/2445.htm

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