House GOP seeks cut and cap for Hoosiers

• Immediate property tax cut by May 2008. Homeowners must receive an immediate property tax cut of at least 40 percent by May of this year. No rebates, no gimmicks. This would reduce homeowner property tax bills by almost $1 billion.

• Permanent state and local spending caps. We must enact permanent caps on local spending, but it is not enough to tighten local purse strings alone. The state also must live within its means. Our proposal limits state spending increases to the growth in personal income in the state and requires a two-thirds vote of the legislature to exceed this permanent cap.

• Permanent 1 percent of assessed valuation homestead cap. Homeowners' property taxes should not exceed 1 percent of their homes' assessed value. This cap would save homeowners $215 million, beginning in 2009.

• Remove schools and welfare from property tax. The state already pays 85 percent of school operating costs statewide; House Republicans believe the state should be responsible for that final 15 percent. Also, local taxpayers are forced to pay child welfare costs even though the programs are administered by state employees through state regulations and standards. The state should foot this bill, bringing another $1.1 billion in property tax relief.

• Make caps and levy removals permanent. Taxpayers (and lawmakers) are fed up with temporary fixes. The limits on taxing and spending discussed above should be made permanent through an amendment to our state's constitution.

• Referenda for local construction and budget increases. Taxpayers should have real control of how their tax dollars are spent by voting on major local construction projects and budget increases that exceed local spending caps. Referenda would give citizens an active role in determining their community's future.

• School construction projects built on local option income tax. Statewide, school debt constitutes 37 percent of the increase in our property tax levy. Placing projects on a voter-approved optional income tax would end the property tax spiral.

• Fund all cuts with sales tax alone. Even if the property tax burden is relieved, public services must still be funded. Replacement funding should come from the state sales tax, rather than a new tax or increasing income or corporate taxes. Almost 20 percent of the sales tax is paid by out-of-state visitors, and the sales tax presents a fair and equitable funding mechanism supported by most Hoosiers. According to the Legislative Services Agency, a one-penny sales tax increase would provide almost $1 billion in property tax relief in 2009.

• Single assessment official in each county. Hoosiers deserve consistent and predictable assessments, a challenge with 1,100 elected assessors in the state. Each county should have a single elected assessor who is trained and qualified to ensure uniform assessments.

• Permanent elimination of homestead property tax. This is the key to truly ending Indiana's property tax crises. House Republicans support the elimination of homestead property taxes by 2012; that process should start with this session.

Where great challenges exist, opportunity is present as well. While other matters will demand our attention, all else shrinks in the face of our current property tax crisis.

Hoosiers have made it clear they expect a solution; the House Republicans' standards for success -- cutting taxes now and capping them forever -- offers immediate relief and permanent reform. Hoosier taxpayers deserve no less.