Hot Topics--The 2001 General Assembly
The Indiana General Assembly finished their 2001 session on time. That was something of a miracle--no special session, despite a budget, legislative district maps and a revenue shortfall. The legislature passed a bunch of bills that will be important for local governments and taxpayers.
They cancelled the $12,500 personal property exemption. This tax break was passed in 1999. It allowed owners of personal property--inventories, equipment, some mobile homes--to exempt the first $12,500 in assessed value from the property tax. The state replaced the money lost by local governments. One reason this tax break was cancelled was because of this state cost, almost $200 million a year. The tax break expires at the end of 2001. The legislature created a new income tax credit for the same amount of business personal property taxes, but it doesn't become available until January 2003.
The legislature invented a fourth local income tax, to go along with CAGIT, COIT and EDIT. This one allows counties to adopt a local income tax, with the revenue used to reduce personal property taxes paid by businesses in the county. Business property taxes are reduced dollar for dollar by the new income tax money. None of the new revenue is "spendable."
Lake County received some special attention from the legislature. The next reassessment will be conducted by an outside private company, not by the local assessors. The cities in Lake County are allowed to adopt a local income tax, but must reduce their spending by 3% a year if they adopt. That means the income tax revenue must be devoted to property tax relief. Low income taxpayers in Lake will benefit from a "circuit breaker," which places a ceiling on the increase in property taxes that result from the next reassessment. The program is funded with local riverboat revenue.
Finally, the State Board of Tax Commissioners will be undergoing some changes next year, because of a bill passed by the General Assembly. The Tax Board will be split in two. One of the new agencies will deal only with assessment appeals. The other will continue to monitor local budgets and oversee property tax assessments. Now, the Tax Board writes the assessment rules, sees that they are applied by local assessors, and judges appeals by taxpayers over local assessments. Under the new system the appeals will be judged by an independent panel.