On. Nov. 2, voters across Indiana stepped to the polls not only to decide who will be their representatives, but also to decide if the property tax caps should be placed in the Indiana Constitution.
While all results will not be official until Nov. 15, the voters appear to have been in favor of the measure as, according to the Secretary of State's website, 1,112,236 (72 percent) voted for the constitutional amendment, while 432,670 were against it, as of 10:33 a.m., Monday.
The property tax caps are split into the following categories:
* 1-percent cap -- Owner-occupied primary residences (Homesteads),
* 2-percent cap -- All other owner-occupied non-primary residences, including apartments and rental properties, and agricultural land, and
* 3-percent cap -- Other real and personal property, including commercial and industrial property.
In recent months, many have expressed support and opposition for the caps, including politicians, business owners, media outlets and various associations.
"The property tax is unarguably the most unfair and unpopular tax in America," Indiana Senator David Long (R-Fort Wayne) said during a pro-cap rally on Oct. 11. "This is why permanent tax caps are so important, because of the security and stability they bring."
At the other end of the spectrum, Wayne County Farm Bureau President Mary Ferris submitted a letter to the Richmond Palladium-Item in late October citing numerous reasons to vote against the measure including, "They are unconstitutional right now, which is why we are being asked to change the constitution so unfair and unequal treatment of taxpayers will become constitutional."
In Clay County, the majority of voters also showed support for adding the caps to the constitution, albeit at a smaller 60.98 percent (4,597-2,941) clip.
In order for an amendment to be added to the constitution, it must be approved by two consecutive sessions of the Indiana State Legislature, along with an intervening General Election.
With the caps in place, several counties have approved Local Option Income Taxes to compensate for potential funding losses due to the caps, and County Auditor Mary Jo Alumbaugh and County Council President Mike McCullough acknowledged they had been planning ahead for the caps to be passed.
"With the LOIT and the property tax replacement portion of the LOIT on residential property, there should be a minimal effect in Clay County," Alumbaugh said. "In addition, the caps may not have much of an effect with most of the rates for the taxing units falling under 3 percent."
McCullough added the full effect of the tax may not yet be in view.
"It will probably take another two or three years before we see the true effect of the caps," he said.
McCullough also told The Brazil Times that the council's approach, particularly during budget hearings should not change.
"We always work on keeping the county under budget in the short term, while also being mindful of how our actions may affect our ability to maintain services in the years ahead," he said. "Our current officeholders are aware of the situation and already are pretty conservative, which is another reason there shouldn't be much of an effect here."
Alumbaugh pointed out that should the legislature decide to remove the caps from the constitution, the same process would have to be taken, but could be more difficult to reverse a decision of such magnitude.
"The legislature would have to approve the repeal of the amendment during two consecutive sessions, then put it on the ballot again," she said. "Then, the voters would also have to agree to removing the caps, after they had already chosen to put them in the constitution, in order for the repeal to go through."
"It is important to bring more industry here to increase the tax base," Alumbaugh said. "If we can do that, it will increase the total assessed value of property in the county, which will lower tax rates and lessen the potential effect of the caps even further."
McCullough added the current level of the tax rates could even make the county more attractive for businesses.
"It is imperative for the county to continue growing and bring more businesses and industry here, not just to keep tax rates low, but to create more jobs to decrease the unemployment rate," McCullough told The Times. "With the rates for taxing units under 3 percent, there is the possibility they could be a big factor in attracting industries here over other counties."