Lawmakers Push for Property Tax Relief

Stateline Midwest, a publication of the Midwestern Office of the Council of State Governments: Vol 19, No. 3: March 2010.

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Constitutional changes in state property tax law will be made in two Midwestern states if Indiana voters approve a plan passed earlier this year by the legislature and if a proposal by Gov. Jim Doyle gains traction in Wisconsin.

At issue in Indiana is whether a 2-year-old tax-caps law should be made part of the state Constitution. HJR 1 would limit property taxes to 1 percent of a home’s assessed value. Taxes for farm and business property would be capped at 2 percent and 3 percent, respectively, of the assessed value. According to The Indianapolis Star, the current tax-caps law is expected to save property owners more than $400 million over each of the next two years. Detractors of the current law and HJR 1 note, however, that these savings come at the expense of local government and services.

In Wisconsin, Doyle wants to amend the uniformity clause in the state Constitution. As the Wisconsin Legislative Reference Bureau notes, this clause, as interpreted by the courts, “prohibits granting preferential property tax treatment to specific property owners.” As a result, Doyle says, Wisconsin is one of only a handful of states prevented from directing property tax relief solely to homeowners. A third Midwestern state, meanwhile, already has taken action in 2010 to provide property tax relief. Iowa’s HF 2030 requires school districts to use their cash reserves before increasing local property taxes to cover budget shortfalls.