Chairman Thompson unveils broad property-tax overhaul; county, municipal and school leaders warn of local impacts and urge careful phasing

Chairman Mike Thompson presented a comprehensive property-tax and local-tax reform package the transcript identifies as the draft under discussion (referred to in committee as 14o2). The package is wide-ranging: it would convert some deductions to credits, change how local units reach the constitutional cap, reorganize local-option income-tax (LIT) authority and distribution, and phase down business personal property (BPP) assessments over several years while increasing the de minimis threshold.

Thompson described the underlying goal as eliminating cap-loss distortions that create incentives for units of local government to increase levies without producing direct homeowner benefit. "If you keep the system we've got, we've got to expect the same result," Thompson told the committee. He proposed a long-term framework in which every parcel would effectively hit the constitutional tax cap at a $3 rate under the planned changes; he framed that as creating a stable, rate-based system and removing perverse incentives that have emerged under a levy-focused approach.

The bill would:

- Convert some property-tax deductions to refundable credits so eligible residents receive a…