Property Tax Betrayal & Incompetence 2002-2007

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Everyone has felt the impact of the 20% statewide sales tax increase imposed by Indiana's General Assembly effective December 1, 2002. The sales tax increase from 5% to 6% will cost Hoosier households with a $25,000 income $150 more per year; a household earning $75,000 will pay $230 more.

Many General Assembly members mislead Hoosiers into believing that the sales tax increase would be used to lower homeowner property taxes. But, the real truth is that General Assemblies and Governors, through their betrayal and incompetence, have turned a promised 16.3% homeowner property tax reduction into a decrease of just 2.4% in only four years. This shameful deception is summarized next (see the General Assembly Property Tax Legislation web page for details). NOTE: each 1% change ranges from $20.184 million to $42.508 million depending on the year and circumstance.

16.3% PROMISE: As a result of the 2002 General Assembly special session, the Pay 2003 property tax for the average homeowner statewide was supposedly to have been reduced 16.3% AFTER reassessment.

3.2% INCOMPETENCE: The so-called Homestead Credit calculation correction ordered by the Governor will decrease the Pay 2003 homeowner property tax reduction to 13.1%.

3.9% BETRAYAL: The 2003 General Assembly budget bill allows for K-12 school funding increases that will decrease the Pay 2004 homeowner property tax reduction to 9.2%.

3.5% BETRAYAL: The manufacturing inventory tax shift provided for in the 2002 General Assembly special session legislation will decrease the Pay 2004 homeowner property tax reduction to 5.7%.

3.9% REDUCTION: Senate Bill 1 (signed by the Indiana Governor on December 12, 2003) will increase the Pay 2004 homeowner property tax reduction to 9.6%.

1.3% REDUCTION: Senate Bill 1 (signed by the Indiana Governor on December 12, 2003) will increase the Pay 2005 homeowner property tax reduction to 10.9%.

0.7% REDUCTION: Senate Bill 1 (signed by the Indiana Governor on December 12, 2003) will increase the Pay 2006 homeowner property tax reduction to 11.6%.

2.9% BETRAYAL: House Bill 1001 (signed by the Indiana Governor on May 13, 2005) will decrease the Pay 2006 homeowner property tax reduction to 8.7% by increasing county levies to enhance services to protect abused and neglected children.

1.2% BETRAYAL: House Bill 1001 (signed by the Indiana Governor on May 13, 2005) will decrease the Pay 2006 homeowner property tax reduction to 7.5% by increasing the school property tax.

1.1% BETRAYAL: House Bill 1001 (signed by the Indiana Governor on May 13, 2005) will decrease the Pay 2006 homeowner property tax reduction to 6.4% by increasing school property taxes to provide textbooks to low-income students, recoup state cuts for transportation, and pay for utility and insurance costs.

5.0% REDUCTION: House Bill 1001 (signed by the Indiana Governor on March 24, 2006) will increase the Pay 2006 homeowner property tax reduction to 11.4% by increasing the state-paid Homestead Credits from 20% to 28%.

4.0% BETRAYAL: House Bill 1001 (signed by the Indiana Governor on May 13, 2005) will decrease the Pay 2007 homeowner property tax reduction to 7.4% by placing a cap on the state's Property Tax Relief Credits (PTRCs) while providing PTRC funding equal to the amount paid in 2002 plus the revenue generated by one percent of the sales tax.

10.0% BETRAYAL: House Bill 1001 (signed by the Indiana Governor on May 13, 2005) will result in a Pay 2007 homeowner property tax increase of 2.6% because of a new rule requiring annual assessments of homes.

1.3% BETRAYAL: House Bill 1001 (signed by the Indiana Governor on May 13, 2005) will result in a Pay 2007 homeowner property tax increase of 3.9% by increasing the school property tax.

5.7% LOCAL LEVY INCREASE: An increase in local government tax collections (as reported by Larry DeBoer, Purdue University Agricultural Economics Department, during a July 23, 2007, presentation to the Indiana Commission on State Tax Tax and Financing Policy) will result in a Pay 2007 homeowner property tax increase of 9.6%.

5.0% BETRAYAL: House Bill 1001 (signed by the Indiana Governor on March 24, 2006) will result in a Pay 2007 homeowner property tax increase to 14.6% by decreasing the state-paid Homestead Credits from 28% to 20%.

6.0% REDUCTION: House Bill 1001 (signed by the Indiana Governor on March 24, 2006) will result in a Pay 2007 homeowner property tax increase of 8.6% by a one-time increase in the state-paid Homestead Deduction from $35,000 to $45,000. (House Bill 1478 signed by the Indiana Governor on May 11, 2007, continues the $45,000 Homestead Deduction in 2008.)

15.0% REDUCTION: House Bill 1001 (signed by the Indiana Governor on May 11, 2007) will result in a Pay 2007 homeowner property tax decrease of 6.4% because of an additional $300 million in homestead credits from the Property Tax Reduction Trust Fund.

4.0% BETRAYAL: The shift of the entire inventory tax in 51 counties provided for in the 2002 General Assembly special session legislation will result in a Pay 2007 homeowner property tax decrease of 2.4%. (Hoosier working families who own their home in 42 counties had their individual income taxes increased in lieu of 4.3% property tax increases from the 2007 inventory tax shift.)

In summary, a promised 16.3% homeowner property tax reduction in 2003 plus 31.9% in reductions and less a cumulative 40.1% from betrayal and incompetence (together with a 5.7% local levy increase), resulted in a homeowner property tax decrease of just 2.4% in 2007.

NOTE: The planned cumulative 20.9% increase in homeowner property taxes listed next was eliminated by HEA 1001, which was signed by the Indiana Governor on March 19, 2008.

3.8% REDUCTION: House Bill 1001 (signed by the Indiana Governor on March 24, 2006) will result in a Pay 2008 homeowner property tax decrease of 6.2% from a Circuit Breaker cap on residential property taxes equal to 2% of the assessed value of the residential property. (Hoosier working families who own their home in 42 counties had their individual income taxes increased in lieu of 4.3% property tax increases from the 2007 inventory tax shift.)

3.7% BETRAYAL: House Bill 1478 (signed by the Indiana Governor on May 11, 2007) will result in a Pay 2008 homeowner property tax decrease of 2.5% from changes to the 2% Circuit Breaker cap, including the exclusion of school general funds from the cap. (Hoosier working families who own their home in 42 counties had their individual income taxes increased in lieu of 4.3% property tax increases from the 2007 inventory tax shift.)

2.5% BETRAYAL: House Bill 1001 (signed by the Indiana Governor on May 11, 2007) will result in a Pay 2008 homeowner property tax that is the same as 2002 because homestead credits from the Property Tax Reduction Trust Fund are reduced to $250 million from $300 million. (Hoosier working families who own their home in 42 counties had their individual income taxes increased in lieu of 4.3% property tax increases from the 2007 inventory tax shift.)

1.2% BETRAYAL: House Bill 1478 (signed by the Indiana Governor on May 11, 2007) will result in a Pay 2009 homeowner property tax increase of 1.2% from a reduction in the Homestead Deduction to $44,000. (Hoosier working families who own their home in 42 counties had their individual income taxes increased in lieu of 4.3% property tax increases from the 2007 inventory tax shift.)

12.5% BETRAYAL: House Bill 1001 (signed by the Indiana Governor on May 11, 2007) will result in a Pay 2009 homeowner property tax increase of 13.7% because homestead credits from the Property Tax Reduction Trust Fund have not been allocated. (Hoosier working families who own their home in 42 counties had their individual income taxes increased in lieu of 4.3% property tax increases from the 2007 inventory tax shift.)

1.2% BETRAYAL: House Bill 1478 (signed by the Indiana Governor on May 11, 2007) will result in a Pay 2010 homeowner property tax increase of 14.9% from a reduction in the Homestead Deduction to $43,000. (Hoosier working families who own their home in 42 counties had their individual income taxes increased in lieu of 4.3% property tax increases from the 2007 inventory tax shift.)

1.2% BETRAYAL: House Bill 1478 (signed by the Indiana Governor on May 11, 2007) will result in a Pay 2011 homeowner property tax increase of 16.1% from a reduction in the Homestead Deduction to $42,000. (Hoosier working families who own their home in 42 counties had their individual income taxes increased in lieu of 4.3% property tax increases from the 2007 inventory tax shift.)

1.2% BETRAYAL: House Bill 1478 (signed by the Indiana Governor on May 11, 2007) will result in a Pay 2012 homeowner property tax increase of 17.3% from a reduction in the Homestead Deduction to $41,000. (Hoosier working families who own their home in 42 counties had their individual income taxes increased in lieu of 4.3% property tax increases from the 2007 inventory tax shift.)

1.2% BETRAYAL: House Bill 1478 (signed by the Indiana Governor on May 11, 2007) will result in a Pay 2013 homeowner property tax increase of 18.5% from a reduction in the Homestead Deduction to $40,000. (Hoosier working families who own their home in 42 counties had their individual income taxes increased in lieu of 4.3% property tax increases from the 2007 inventory tax shift.)

This page was last updated on 03/31/13 .