Indiana s Constitutional Referendum On Tax Caps, November 2010

Purdue Cooperative Extension Service Indiana s Constitutional Referendum On Tax Caps, November 2010 Larry DeBoer Department of Agricultural Economics Purdue University September 2010 For more information DeBoer s Indiana Local Government Information Website: www.agecon.purdue.edu/crd/localgov

The Tax Cap Constitutional referendum, on the ballot on November 2, 2010: PUBLIC QUESTION #1 SHALL PROPERTY TAXES BE LIMITED FOR ALL CLASSES OF PROPERTY by amending the Constitution of the State of Indiana to do the following: (1) Limit a taxpayer's annual property tax bill to the following percentages of gross assessed value: (A) 1% for an owner-occupied primary residence (homestead); (B) 2% for residential property, other than an owner-occupied primary residence, including apartments; (C) 2% for agricultural land; (D) 3% for other real property; and (E) 3% for personal property. The above percentages exclude any property taxes imposed after being approved by the voters in a referendum. (2) Specify that the General Assembly may grant a property tax exemption in the form of a deduction or credit and exempt a mobile home used as a primary residence to the same extent as real property? The Tax Cap Constitutional Amendment, to Article 10, Section 1 of the Indiana Constitution [Regular text shows the Constitution as it is now. Bold text is added, crossed-out text is eliminated] Article 10, Section 1. (a) Subject to this section, the General Assembly shall provide, by law, for a uniform and equal rate of property assessment and taxation and shall prescribe regulations to secure a just valuation for taxation of all property, both real and personal. (b) A provision of this section permitting the General Assembly to exempt property from taxation also permits the General Assembly to exercise its legislative power to enact property tax deductions and credits for the property. The General Assembly may impose reasonable filing requirements for an exemption, deduction, or credit. (c) The General Assembly may exempt from property taxation any property in any of the following classes: (1) Property being used for municipal, educational, literary, scientific, religious, or charitable purposes. (2) Tangible personal property other than property being held as an investment. (3) Intangible personal property. (4) Tangible real property, including curtilage, used as a principal place of residence by an: (A) owner of the property; (B) individual who is buying the tangible real property under a contract; or (C) individual who has a beneficial interest in the owner of the tangible real property. 1

(b) (d) The General Assembly may exempt any motor vehicles, mobile homes (not otherwise exempt under this section), airplanes, boats, trailers, or similar property, provided that an excise tax in lieu of the property tax is substituted therefor. (e) This subsection applies to property taxes first due and payable in 2012 and thereafter. The following definitions apply to subsection (f): (1) "Other residential property" means tangible property (other than tangible property described in subsection (c)(4)) that is used for residential purposes. (2) "Agricultural land" means land devoted to agricultural use. (3) "Other real property" means real property that is not tangible property described in subsection (c)(4), is not other residential property, and is not agricultural land. (f) This subsection applies to property taxes first due and payable in 2012 and thereafter. The General Assembly shall, by law, limit a taxpayer's property tax liability as follows: (1) A taxpayer's property tax liability on tangible property described in subsection (c)(4) may not exceed one percent (1%) of the gross assessed value of the property that is the basis for the determination of property taxes. (2) A taxpayer's property tax liability on other residential property may not exceed two percent (2%) of the gross assessed value of the property that is the basis for the determination of property taxes. (3) A taxpayer's property tax liability on agricultural land may not exceed two percent (2%) of the gross assessed value of the land that is the basis for the determination of property taxes. (4) A taxpayer's property tax liability on other real property may not exceed three percent (3%) of the gross assessed value of the property that is the basis for the determination of property taxes. (5) A taxpayer's property tax liability on personal property (other than personal property that is tangible property described in subsection (c)(4) or personal property that is other residential property) within a particular taxing district may not exceed three percent (3%) of the gross assessed value of the taxpayer's personal property that is the basis for the determination of property taxes within the taxing district. (g) This subsection applies to property taxes first due and payable in 2012 and thereafter. Property taxes imposed after being approved by the voters in a referendum shall not be considered for purposes of calculating the limits to property tax liability under subsection (f). (h) As used in this subsection, "eligible county" means only a county for which the General Assembly determines in 2008 that limits to property tax liability as described in subsection (f) are expected to reduce in 2010 the aggregate property tax revenue that would otherwise be collected by all units of local government and school corporations in the county by at least twenty percent (20%). The General Assembly may, by law, provide that property taxes imposed in an eligible county to pay debt service or make lease payments for bonds or leases issued or entered into before July 1, 2008, shall not be considered for purposes of calculating the limits to property tax liability under subsection (f). Such a law may not apply after December 31, 2019. 2

Property Tax Calculations for Four Taxpayers Lower Valued Homestead Higher Valued Homestead Rental Apartment Business Gross Assessed Value 90,000 250,000 250,000 250,000 Deductions Homestead Standard 45,000 45,000 35% Supplemental 15,750 71,750 Mortgage 3,000 3,000 Net Assessed Value 26,250 130,250 250,000 250,000 Tax Rate per $100 AV 2.50 2.50 2.50 2.50 Tax Bill before Credit 656 3,256 6,250 6,250 Tax Cap Rate 1% 1% 2% 3% Tax Cap 900 2,500 5,000 7,500 Tax Cap Credit - 756 1,250 - Tax Bill after Credit 656 2,500 5,000 6,250 Tax Cap Credits with Alternate Tax Rates Tax Rate: 1.50 - - - - 2.00-105 - - 2.50-756 1,250-3.00-1,408 2,500-3.50 19 2,059 3,750 1,250 Assumes no local property tax credits. Assumes no tax rates passed by referendum, which are outside the tax caps. Debt service tax rates in Lake and St. Joseph Counties are outside the tax caps. Percent of Homesteads Eligible for Tax Cap Credits by Gross Assessed Value and Net Tax Rate, 2010, Indiana (89 counties) Net Tax Rate Range Gross Assd. Value Less than $2.00 $2 to $3.00 $3 or More Total Number Less than $110,000 0.2% 3.4% 18.9% 4.2% 808,801 $110,000 to $250,000 0.7% 41.4% 67.8% 17.0% 659,399 More than $250,000 13.9% 81.4% 94.8% 31.2% 119,573 Total 1.8% 22.4% 31.2% 11.5% 1,587,773 Number 907,750 517,192 162,831 1,587,773 3

Credit Percent of Levy Tax Cap Credits by Property Type, 2010 Indiana (90 Counties) Business Real/Personal (3%), $73,047,348 Over-65 Homestead 2% Limit, $2,269,501 Homesteads (1%), $90,486,195 Rentals/Farmland (2%), $169,177,776 20% Tax Cap Credits as a Percent of Total Levy, by District Tax Rate and Property Type, 2010, Indiana (90 Counties) 18% 16% 14% Business Real/Personal (3%) Rentals/ Farmland (2%) Homesteads (1%) 12% 10% 8% 6% 4% 2% 0% $3.00 or More $2.00 - $3.00 Less than $2.00 All Districts District Tax Rate 4

Credit Percent of Levy Credit Percent of Levy Tax Cap Credits as a Percent of Total Levy, by City/Town Districts and Property Type, 2010, Indiana (90 Counties) 9% 8% 7% 6% Business Real/Personal (3%) Rentals/Farmland (2%) Homesteads (1%) 5% 4% 3% 2% 1% 0% Districts with Cities/Towns Districts without Cities/Towns All Districts Tax Cap Credits as a Percent of Total Levy, by Unit Type and Property Type, 2010, Indiana (90 Counties) 12% 10% 8% Business Real/Personal (3%) Rentals/ Farmland (2%) Homesteads (1%) 6% 4% 2% 0% Counties Townships Cities / Towns School Corporations Libraries Special Districts TIF Districts All Units Taxing Units 5

Percent Change in Property Tax Payments by Property Type Porter County and Indiana (90 Counties) 2007-2010 Total Business Personal Comm/Industrial Real Agriculture Apartments Non-Hmstd Residential Homesteads -3.7% -9.8% -5.8% -1.0% -17.1% -21.4% -24.7% -16.1% -26.5% Porter Indiana 38.7% 15.2% 28.2% 14.7% 21.4% -30% -20% -10% 0% 10% 20% 30% 40% Percent Change in Property Tax Payments by Property Type Lake County and Indiana (85 Counties) 2007-2009 Total Business Personal -19.2% -21.3% -10.2% -6.2% Lake Indiana Comm/Industrial Real -9.2% 9.8% Agriculture 6.7% 10.3% Apartments -14.8% -9.7% Non-Hmstd Residential -21.2% -12.8% Homesteads -25.7% -27.0% -40% -30% -20% -10% 0% 10% 20% 30% 40% 6

Porter County Tax Districts and Tax Rates, 2010 001 BOONE TOWNSHIP 2.2969 002 HEBRON (BOONE) 2.8559 003 CENTER TOWNSHIP 1.3672 004 VALPARAISO (CENTER) 2.2199 005 JACKSON TOWNSHIP 1.3789 006 LIBERTY TOWNSHIP 1.4299 007 CHESTERTON-LIBERTY TWP 2.1996 008 MORGAN TOWNSHIP 1.5730 009 PINE TOWNSHIP-MICH CITY SCH. 1.6267 010 PINE TOWNSHIP-DUNELAND SCH. 1.4267 011 BEVERLY SHORES (PINES) 1.8900 012 PINES TOWN (PINES TWP) 1.9964 013 PLEASANT TOWNSHIP 1.6432 014 KOUTS (PLEASANT) 2.0083 015 PORTAGE TOWNSHIP 1.8255 016 PORTAGE CITY-PORTAGE TWP 2.4792 017 OGDEN DUNES (PORTAGE) 1.8913 018 PORTER TOWNSHIP 1.5175 019 UNION TOWNSHIP 1.5020 020 WASHINGTON TOWNSHIP 1.6082 021 WESTCHESTER TOWNSHIP 1.4703 022 PORTAGE CITY-WESTCHESTER TWP 2.4097 023 CHESTERTON-WESTCHESTER TWP 2.2586 024 BURNS HARBOR (WESTCHESTER) 1.7884 025 DUNE ARCES (WESTCHESTER) 1.7433 026 PORTER TOWN (WESTCHESTER) 2.3534 027 CHESTERTON-JACKSON TWP 2.1833 028 PORTER TWP-W PORTER FIRE 1.4939 029 VALPARAISO-WASHINGTON TWP 2.5325 7

Porter County Tax Cap Credits by Property Type and Government Unit Taxing Unit Name (1%) Homesteads Circuit Breaker Credits by Property Type (2%) Other Residential and Farmland (3%) All Other Real/Personal Elderly Total Levy Circuit Breaker as % of Levy Non-TIF Total 1,130,279 2,596,027 0 38,301 3,764,608 171,607,333 2.2% TIF Total 350 61,314 0 1 61,664 14,345,528 0.4% County Total 1,130,629 2,657,341 0 38,302 3,826,272 185,952,861 2.1% Porter County 201,023 450,751 0 7,264 659,038 36,239,384 1.8% Boone Township 1,871 7,406 0 13 9,289 157,668 5.9% Center Township 2,760 6,872 0 109 9,741 1,482,751 0.7% Jackson Township 172 33 0 7 212 133,631 0.2% Liberty Township 741 267 0 54 1,062 333,942 0.3% Morgan Township 0 0 0 0 0 89,038 0.0% Pine Township 100 0 0 5 105 101,808 0.1% Pleasant Township 0 46 0 18 64 202,796 0.0% Portage Township 8,664 25,388 0 1,266 35,318 2,163,770 1.6% Porter Township 0 0 0 36 36 290,309 0.0% Union Township 0 0 0 42 42 328,254 0.0% Washington Township 211 212 0 0 423 205,813 0.2% Westchester Township 565 1,076 0 32 1,673 163,869 1.0% Valparaiso Civil City 149,400 354,400 0 1,789 505,590 16,643,236 3.0% Portage Civil City 107,418 355,714 0 6,229 469,360 14,646,066 3.2% Chesterton Civil Town 123,715 127,269 0 2,718 253,701 5,558,222 4.6% Beverly Shores Civil Town 1,712 0 0 0 1,712 559,190 0.3% Burns Harbor Civil Town 0 0 0 27 27 1,861,083 0.0% Dune Acres Civil Town 72 0 0 0 72 295,051 0.0% Hebron Civil Town 13,856 47,193 0 145 61,193 617,575 9.9% Kouts Civil Town 0 281 0 65 346 340,323 0.1% Ogden Dunes Civil Town 5,108 0 0 0 5,108 669,671 0.8% Porter Civil Town 27,440 95,444 0 1,002 123,885 2,070,309 6.0% Pines Civil Town 0 0 0 0 0 94,214 0.0% Michigan City Area School Corp 5,429 0 0 55 5,484 2,424,057 0.2% Boone Township School Corp 53,342 200,894 0 427 254,663 3,759,329 6.8% Duneland School Corp 150,823 219,553 0 4,618 374,994 20,535,971 1.8% East Porter County School Corp 12,462 13,258 0 228 25,948 8,471,638 0.3% Porter Township School Corp 0 0 0 390 390 4,343,242 0.0% Union Township School Corp 0 0 0 555 555 4,368,353 0.0% Portage Township School Corp 113,255 331,865 0 7,759 452,879 17,614,446 2.6% Valparaiso Community School Corp 100,389 249,972 0 1,648 352,009 16,322,520 2.2% Westchester Public Library 19,670 37,502 0 713 57,885 2,417,314 2.4% Porter County Public Library 26,522 62,648 0 957 90,128 5,324,557 1.7% West Porter Township Fire Protection 0 0 0 5 5 136,139 0.0% Porter Co Solid Waste Mgt Dist 0 0 0 0 0 0 Porter Co Airport Authority 3,560 7,983 0 129 11,671 641,794 1.8% Valparaiso Redevelopment Comm 0 0 0 0 0 0 Burns Harbor Town Redevelopment 0 0 0 0 0 0 Porter Redevelopment Comm 0 0 0 0 0 0 Portage Redevelopment Comm 0 0 0 0 0 0 Chesterton Redevelopment Comm 0 0 0 0 0 0 TIF - TIF #1-026 Porter (11) 106 7,893 0 1 7,999 946,151 0.8% TIF - TIF #2-016 Portage (8) 2 2,244 0 0 2,246 5,976,209 0.0% TIF - TIF #2-022 Portage West (24) 0 141 0 0 141 687 20.5% TIF - TIF #3-004 Valparaiso (01) 0 44,845 0 0 44,845 3,188,340 1.4% TIF - TIF #4-004 Valparaiso (01) 0 527 0 0 527 611,215 0.1% TIF - TIF #5-029 Wash Valpo (29) 0 0 0 0 0 421,634 0.0% TIF - TIF #6-029 Wash Valpo (29) 0 295 0 0 295 1,261,361 0.0% TIF - TIF #7-023 Chesterton (10) 242 3,322 0 0 3,565 839,253 0.4% TIF - TIF #7-007 Chest/Chest Liberty (26) 0 1,212 0 0 1,212 522,672 0.2% TIF - TIF #7-027 Chest/Chest Jackson (27 0 0 0 0 0 0 TIF - TIF #8-024 Burns Harbor (25) 0 0 0 0 0 505,119 0.0% TIF - TIF #9-004 Valparaiso (01) 0 133 0 0 133 23,182 0.6% TIF - TIF #10-002 Hebron (17) 0 702 0 0 702 49,706 1.4% 8

Lake County Tax Districts and Tax Rates, 2009 001 Calumet Township 3.6750 002 Calumet Township Gary Sanitary 4.0775 003 Gary Corp Calumet Twp Lake Ridge Sch 6.7232 004 Gary Corp Calumet Twp Gary Sch 6.1882 005 Lake Station Corp Calumet Twp 4.4140 006 Griffith Corp Calumet Twp 3.5930 007 Cedar Creek Township 2.0536 008 Lowell Corp Cedar Creek Twp 2.7486 012 Eagle Creek Township 1.9990 013 Hanover Township 1.9295 014 Cedar Lake Corp Hanover Twp 2.4019 015 Saint John Corp Hanover Twp 2.4861 016 Hobart Township 2.3404 017 Gary Corp Hobart Twp River Forest Sch 5.8239 018 Hobart Corp Hobart Twp Hobart City Sch 3.1874 019 Hobart Corp Hobart Hobart City Sch Gary Sanitary 3.5899 020 Lake Station Corp Hobart Twp River Forest Sch 4.2895 021 Lake Station Corp Hobart Twp Lake Station Sch 3.9802 022 New Chicago Corp (Hobart) 3.1925 023 Hammond Corp (North) 4.4685 024 East Chicago Corp (North) 7.4004 025 Whiting Corp (North) 4.2523 026 Highland Corp (North) 2.2280 027 Munster Corp (North) 2.6230 028 Ross Township 2.0473 029 Crown Point Corp Ross Twp 2.6957 030 Merrillville Corp Ross Twp 2.4674 031 Merrillville Corp Ross Twp Gary Sanitary 2.8699 032 Saint John Township 1.3533 033 Griffith Corp Saint John Twp 2.2398 034 Dyer Corp (Saint John) 2.0873 035 Saint John Corp Saint John Twp 1.9302 036 Schererville Corp (Saint John) 1.8142 037 West Creek Township 1.9774 038 Lowell Corp West Creek Twp 2.7292 039 Schneider Corp (West Creek) 3.4997 041 Center Township 1.7722 042 Crown Point Corp Center Twp 2.3392 043 Cedar Lake Corp Center Twp 2.2483 044 Winfield Township 1.7842 045 Hobart Corp Hobart Twp River Forest Sch 3.4335 046 Hobart Corp Ross Twp 3.1321 047 Winfield Corp (Winfield) 1.9961 048 Hobart Corp Ross (TIF Only, see CMT added 049*) 1.0958 050 Saint John Township Schererville Water 1.3533 054 Winfield Corp Winfield Water District 2.0816 055 SAINT JOHN TWP SAINT JOHN WATER 1.4245 056 CROWN POINT - ST. JOHN TWP. 1.8919 057 CEDAR LAKE - WEST CREEK TWP. 2.5127 058 CEDAR LAKE - CEDAR CREEK TWP. 2.5321 059 ST. JOHN - CENTER TWP. 2.3537 9

Lake County Tax Cap Credits by Property Type and Unit, 2009 Percent of Unit Name 1.50% 2.50% 3.50% Elderly T otal Levy Levy Lake County 276,206 2,561,642 3,449,798 16,347 6,303,994 118,561,961 5.3% Calumet Township 154,669 1,313,198 1,407,006 5,018 2,879,892 15,159,188 19.0% Cedar Creek Township 0 0 0 81 81 729,248 0.0% Center Township 0 0 0 107 107 616,064 0.0% Eagle Creek Township 0 0 0 0 0 146,520 0.0% Hanover Township 0 0 0 45 45 385,608 0.0% Hobart Township 38 6,220 216 92 6,566 554,958 1.2% North Township 15,880 157,369 281,616 1,073 455,938 4,871,256 9.4% Ross Township 10 0 0 11 21 1,091,342 0.0% St. John Township 0 0 0 0 0 708,837 0.0% West Creek Township 0 89 0 21 110 303,118 0.0% Winfield Township 0 0 0 4 4 350,064 0.0% Gary Civil City 869,197 7,293,491 7,936,640 15,684 16,115,012 63,064,081 25.6% Hammond Civil City 42,055 1,910,011 0 11,738 1,963,805 39,830,971 4.9% East Chicago Civil City 477,889 2,488,590 10,044,233 8,164 13,018,876 37,078,926 35.1% Hobart Civil City 393 0 0 1,444 1,837 15,446,724 0.0% Crown Point Civil City 157 0 0 164 322 9,519,880 0.0% Whiting Civil City 34,316 178,892 431,215 943 645,366 6,386,270 10.1% Lake Station Civil City 38 185,193 0 751 185,983 4,613,928 4.0% Cedar Lake Civil Town 0 0 0 861 861 2,506,210 0.0% Griffith Civil Town 250 0 0 3,557 3,808 5,860,095 0.1% Highland Civil Town 0 0 0 1,980 1,980 7,610,699 0.0% Munster Civil Town 143 0 0 211 354 10,657,098 0.0% Merrillville Civil Town 0 0 0 30 30 8,020,569 0.0% Dyer Civil Town 0 0 0 0 0 5,407,419 0.0% Lowell Civil Town 0 0 0 965 965 2,714,237 0.0% New Chicago Civil Town 101 0 0 0 101 307,355 0.0% St. John Civil Town 0 0 0 180 180 4,988,978 0.0% Schererville Civil Town 0 0 0 17 17 9,713,884 0.0% Schneider Civil Town 0 2,065 0 0 2,065 126,530 1.6% Winfield Civil Town 0 0 0 0 0 854,956 0.0% Winfield Civil City 0 0 0 0 0 0 Hanover Community School Corporation 0 0 0 324 324 6,439,010 0.0% River Forest Community School Corporatio 190 27,120 2,567 0 29,877 2,805,305 1.1% Merrillville School Corporation 123 0 0 134 258 34,649,877 0.0% Lake Central School Corporation 0 0 0 11 11 21,125,319 0.0% Tri Creek School Corporation 0 484 0 456 940 11,743,243 0.0% Lake Ridge School Corporation 1,762 81,823 118,031 53 201,669 5,737,557 3.5% Crown Point Community School Corporation 1 0 0 668 669 22,800,251 0.0% East Chicago City School Corporation 112,843 587,626 2,371,726 1,928 3,074,123 24,303,942 12.6% Lake Station School Corporation 12 38,731 0 243 38,986 2,246,229 1.7% Gary Community School Corporation 360,928 2,970,900 3,158,737 6,534 6,497,098 28,527,702 22.8% Griffith Public School Corporation 129 0 0 1,837 1,966 8,398,518 0.0% Hammond City School Corporation 13,138 596,702 0 3,667 613,507 36,229,753 1.7% Highland Town School Corporation 0 0 0 966 966 7,271,197 0.0% School City Of Hobart School Corporation 169 0 0 548 717 9,290,843 0.0% Munster Community School Corporation 128 0 0 190 318 13,986,217 0.0% Whiting City School Corporation 10,392 54,174 130,585 286 195,437 2,456,148 8.0% East Chicago Public Library 71,867 374,243 1,510,489 1,228 1,957,827 5,095,594 38.4% Gary Public Library 96,051 790,626 840,614 1,739 1,729,029 6,619,243 26.1% Hammond Public Library 3,983 180,874 0 1,112 185,968 4,757,053 3.9% Lowell Public Library 0 111 0 105 216 1,063,294 0.0% Whiting Public Library 5,595 29,165 70,301 154 105,214 1,024,633 10.3% Lake County Public Library 300 17,392 11,295 973 29,960 11,861,443 0.3% Crown Point Community Public Library 0 0 0 120 120 1,320,331 0.0% East Chicago Sanitary 152,132 792,223 3,197,504 2,599 4,144,459 11,753,079 35.3% Gary Sanitary 98,206 829,957 896,728 1,772 1,826,664 9,497,343 19.2% Hammond Sanitary 1,913 85,613 0 567 88,092 7,867,078 1.1% Highland Sanitary 0 0 0 55 55 806,590 0.0% Whiting Sanitary 9,792 51,048 123,050 269 184,159 2,794,390 6.6% Gary Airport 23,146 194,222 211,348 418 429,134 1,657,731 25.9% Gary Redevelopment 3,325 27,901 30,362 60 61,647 238,115 25.9% Hammond Redevelopment 491 22,303 0 137 22,931 457,801 5.0% Gary Public Transportation 37,456 314,300 342,015 676 694,447 3,889,205 17.9% Merrillville Sanitary District 0 0 0 0 0 0 Highland Water District 0 0 0 0 0 0 Schererville Waterworks 0 0 0 0 0 0 Winfield Waterworks 0 0 0 0 0 29,448 0.0% Hobart Sanitary 0 0 0 0 0 0 St. John Sanitary 0 0 0 11 11 416,076 0.0% Lake Ridge Fire Protection 105 7,031 0 11 7,148 458,853 1.6% Lake County Solid Waste 0 0 0 0 0 0 St. John Water District 0 0 0 9 9 215,579 0.0% Lake County Solid Waste 0 0 0 0 0 0 Town Of Dyer Sanitary District 0 0 0 0 0 736,252 0.0% Dyer Redevelopment 0 0 0 0 0 0 Lake County Solid Waste 0 0 0 0 0 0 Lake County Solid Waste Management Distr 11,988 110,772 149,879 701 273,340 4,719,897 5.8% Gary Storm Water Management 13,116 110,058 119,762 237 243,172 938,852 25.9% Dyer Water Works 0 0 0 0 0 315,878 0.0% Gary Redevelopment Commission 5,180 43,470 47,304 93 96,048 371,912 25.8% 10

Some Effects of the Tax Cap Constitutional Referendum The amendment will not provide additional property tax relief, since the provisions of the amendment are already in law, and are already restricting property tax bills. o It will prevent future adjustments in property tax relief from raising property tax bills above the caps (e.g., a reduction in the homestead deductions can only raise homeowners taxes to 1% of gross assessed value). The amendment will prevent Constitutional challenges to the tax caps. o Article 10, Section 1 of the Constitution says the General Assembly shall provide, by law, for a uniform and equal rate of property assessment and taxation.... The differential tax caps may not be consistent with uniformity, though the Constitution does allow differential tax breaks for homesteads. The amendment will make permanent the reduction in property tax revenues received by local governments. o Local governments will try to become more efficient, in order to deliver services at lower cost. Some of these efficiencies may involve changes in procedures (joint purchasing, for example), others may involve changes in structure (consolidation, even elimination of some levels of government such as townships). o Indiana residents may have to accept a lower level of services, if local governments have less revenue and efficiency cannot be improved enough. o Local governments may turn to other revenue sources, such as local income taxes and charges/fees. Local governments may ask the legislature for more nonproperty tax options. The amendment will place code language in the Constitution, rather than general principles or procedures. o A definitions section (e). o An expiration date (h). The amendment will eliminate the Distressed Units Appeals Board (at least in its present form). o There is no provision for appealing the tax caps in the amendment. 11