Property Tax Betrayal & Incompetence

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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 20.3% increase in just four years. This shameful deception is summarized next (see the General Assembly Property Tax Legislation web page for details). NOTE: each 1% change equals $20.184 million.

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%.

13.6% BETRAYAL: House Bill 1001 (signed by the Indiana Governor on May 13, 2005) will result in a Pay 2007 homeowner property tax increase of 2.2% 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.

9.5% BETRAYAL: House Bill 1001 (signed by the Indiana Governor on May 13, 2005) will result in a Pay 2007 homeowner property tax increase of 11.7% 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 13.0% by increasing the school property tax.

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 18.0% 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 12.0% by a one-time increase in the state-paid Homestead Deduction from $35,000 to $45,000.

8.3% BETRAYAL: The shift of the entire inventory tax provided for in the 2002 General Assembly special session legislation will result in a Pay 2007 homeowner property tax increase of 20.3%. (Even though some counties increased individual income taxes in lieu of property tax increases, the effect on Hoosier working families who own their home is the same.)

In summary, a 16.3% promise plus 16.9% in reductions and less a cumulative 53.5% from betrayal and incompetence, result in a homeowner property tax increase of 20.3%.

This page was last updated on 03/19/10 .