Key foes won’t campaign against Indiana tax caps

Two prominent groups that have fought against the statewide property tax caps championed by Gov. Mitch Daniels are going to sit out the November referendum on whether to put the limits into the state constitution.

The Indiana Farm Bureau and the Indiana Chamber of Commerce have all but given up efforts to defeat the amendment after failing to stop it from clearing the General Assembly in January, The Courier-Journal of Louisville, Ky., reported Thursday.

Both opponents and supporters say putting the caps into the constitution would make it more difficult to undo a state law passed in 2008 that generally limits property tax bills to 1 percent of homes' assessed value, with 2 percent caps on farmland and rental property and 3 percent limits on business property.

The two groups oppose the caps because they think it's unfair to treat commercial and residential property differently.

"We gave it our best fight in the General Assembly this year and it fell flat," Bob Kraft, director of state government relations for the Indiana Farm Bureau, told the newspaper. "There comes a time when you fold your cards and count your money and we've hit that point."

Daniels proposed the caps after tax bills skyrocketed in much of the state in 2007 because of new assessment rules and other factors, sending hordes of homeowners to the Statehouse demanding reform.

The 2008 law raised the state sales tax from 6 percent to 7 percent to help pay for property tax relief, but local governments and school districts have faced millions of dollars in revenue losses from the caps.

The decision by the Farm Bureau and the Chamber of Commerce leaves only a loose coalition of lesser-funded groups led by the Indiana Urban Schools Association to fight the proposal — and those groups lack the money for commercials or mailings.

They will rely instead on public meetings and low-cost advertising to spread their message that the property tax caps will hamper the ability of local governments and schools to deliver services, said Charles Little, executive director of the urban schools association.

"The public needs to go into this with their eyes wide open," Little said. "Polling indicates this thing is going to be overwhelmingly adopted but the implications will go well beyond this election."

Sixty-four percent of Indiana residents surveyed in December by Ball State University's Bowen Center for Public Affairs favored the constitutional amendment. The proposed amendment needs a simple majority of votes to pass.

Bill Waltz, vice president for taxation and public finance at the Indiana Chamber of Commerce, said those numbers have influenced most opponents that it's not worth spending money to try to defeat the proposal.

"It doesn't seem all that probable that you're going to sway 20 percent of the people on this subject particularly," Waltz said. "We didn't see the point in expending any resources on it."