Daniels said tax bills will be frozen at 2006 levels, and that a big part of the county's property tax calamity appeared to be that business assessments were not done or were performed inaccurately.
Marion County property taxes increased an average of 35 percent, but some taxpayers saw their taxes double or triple. Statewide, taxes are expected to increase an average of 24 percent.
Seeking a long-term solution to the problem, Daniels this morning announced that Chief Justice Randall T. Shepard and former Gov. Joe Kernan have agreed to lead a bipartisan commission to find ways to streamline government. The new commission is charged with taking a sweeping look at government across the state.
Along with reviewing prior studies of local government reform, the commission will collect its own information about whether township and county property tax assessors should be replaced by the state, and which schools, libraries and other government units could be consolidated.
The commission also will consider which local government functions can be eliminated or provided in new ways to cut costs.
The commission will make its findings public in December, before the 2008 General Assembly.
A statement issued by Daniels said local government "has remained fundamentally unchanged since the Civil War," and is bloated with 2,730 local government units and approximately 10,746 elected officials with the ability to tax property.
"The unneeded overhead of this antique system drains dollars from our school classrooms, from our public safety first responders and from the pockets of property taxpayers," Daniels said. "Indiana will never be able to provide excellent local services at reasonable tax levels until true reform occurs."
Additional members will be appointed to the commission soon, according to the governor's office. The commission will operate under the Center for Urban Policy and the Environment at Indiana University, which will provide staff support and facilities for the commission's work.
As a part of the commission, the Chief Justice will be studying a reassessment system that he helped lay the groundwork for almost a decade ago. In December 1998, the Indiana Supreme Court found the state's tax assessment system unconstitutional and held that property needed to be assessed using a system based on market values. Lawmakers eventually passed and ordered that reassessment for 2002, and now the system is under fire again.
Homeowners have launched a legal battle over the high property taxes. On July 10, a group of Marion County homeowners filed a class action lawsuit requesting a reassessment. Hancock Circuit Judge Richard Culver will consider the case at an emergency hearing next Tuesday morning.