Adopted May 1975, Amended November 1998

The League of Women Voters of Indiana recommends the following changes in legislation and procedures in the Indiana property tax system:

• The state legislature should establish procedures for periodically reviewing the validity of preferential property tax treatment for individuals and organizations.

• Property tax exemptions for organizations which do not strictly qualify under constitutional guidelines (Art. 10, Sec. 1) should be removed.

• The names, assessed values, and purposes of organizations whose property is tax-exempt should be published yearly.

• Property tax relief for persons should be given uniformly to all in hardship circumstances and should be based on economic need.

• It should be administered and financed by the state.

• The amount of aid and guidelines for eligibility should be periodically updated to reflect economic conditions.

• Owners of exempt properties should be required to make payments in lieu of taxes for services provided them by governments.

• The mortgage deduction should be eliminated.

In evaluating the effects of Indiana laws and procedures governing exemptions and deductions from property taxes, the members of the League of Women Voters made the following observations in their study of property taxes.

Although the original purposes for many exemptions and deductions were desirable, the exemptions and deductions are no longer doing the job for which they were designed.

Loose interpretation of the eligibility of organizations for exemption from property taxation has allowed exemptions for many organizations whose primary functions do not meet the constitutional guidelines of being organized for municipal, religious, educational, literary, scientific, or charitable purposes.

Property tax exemptions and deductions which are mandated by the state narrow the tax base of local governments and are paid for by an increase in the tax rate for owners of non-exempt property and/or a reduction in services offered by local governments.

The uneven distribution of tax-exempt property among taxing districts causes an unequal economic impact on local tax bases.

While many classes of individuals in hardship circumstances need some relief from the burden of property taxes, Indiana's system, which includes some, excludes others, and awards benefits using unequal rules for qualification, renders the property tax less regressive for some at the expense of others in similar hardship circumstances, e.g., the elderly, low-income renters, the disabled.

The mortgage deduction, because it applies only to owners of mortgaged property, excluding those who rent or buy on contract, causes vertical and horizontal inequity.