You've got to give lawmakers credit for attacking property tax reform with a vengeance in the opening days of the 2008 General Assembly. But there's political danger ahead if the debate turns into an all-or-nothing proposition.

You've got to give lawmakers credit for attacking property tax reform with a vengeance in the opening days of the 2008 General Assembly. But there's political danger ahead if the debate turns into an all-or-nothing proposition.

On one side: the abolitionists. These folks want to ride the wave of anti-tax sentiment that erupted across the state after the last reassessment. They're backing Senate Joint Resolution 8, authored by Sens. Brent Waltz, R-Greenwood, and Mike Young, R-Indianapolis, which would change the Constitution to prohibit property taxes, at least for residential property owners. The $2.9 billion in lost revenue would be made up through a combination of higher income, sales and use taxes.

On the other side: the cappers. These folks support Gov. Mitch Daniels' proposal for a constitutional amendment that would cap property taxes at 1 percent of a home's assessed value. Under this plan, property taxes would continue to fund many local services, but not big-ticket items like child welfare and the school general fund. To afford this, the sales tax would be raised from 6 to 7 percent.

The danger: One side will view its plan as superior solution and, this being an election year, label the other side as obstructionists or foot draggers.

If that happens, Hoosiers can kiss property tax reform goodbye.

There is a compromise that would make abolition of property taxes possible down the road, while in the meantime protecting homeowners from the hefty tax hikes that hit our mailboxes last summer. Watchdog Indiana, an Internet-based advocacy group directed by Aaron Smith, has presented the compromise language to House and Senate committees, but has yet to get much response.

Too bad, because his idea is close to ideal.

Under Article 10 of the Constitution, the General Assembly has no choice but to collect property taxes. It must "provide, by law, for a uniform and equal rate of property assessment and taxation." Smith's language would amend the Constitution to make property taxes optional rather than mandatory. If lawmakers chose to collect them, they would have to "exempt the tangible base from tax liability that exceeds 1 percent of the assessed value of the property that is the basis for the determination of property taxes." That's the 1 percent cap.

"It makes perfect sense," Smith contends. "If the citizens truly want elimination, my words give the General Assembly the option to pursue it in a measured fashion that could yield the very best results rather than rush to judgment in a short session."

This really is a compromise that forces the cappers and abolitionists to meet halfway.

A 1 percent cap eliminates the most egregious element of Indiana's tax system -- the unpredictable and potentially dramatic increases Hoosiers can face following reassessment. But forcing the elimination issue during a short session could sabotage everything. The Watchdog Indiana compromise may give abolitionists and cappers the best of both worlds.