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Some county officials hope to see property tax cap revisited

Some Elkhart County officials want state lawmakers to take another look at the planned reduction of property tax caps in 2010, worried about the likely resulting revenue dip in years to come. Dennis Sharkey, Elkhart County Council vice president, expressed concern about the "double whammy" of tightening property tax caps and the likely dip in the assessed valuation of land brought on by the tough
Posted on Sept. 24, 2009 at 1:00 a.m. | Updated on Sept. 24, 2009 at 8:16 a.m.

BY TIM VANDENACK

tvandenack@etruth.com

GOSHEN -- Some Elkhart County officials want state lawmakers to take another look at the planned reduction of property tax caps in 2010, worried about the likely resulting revenue dip in years to come.

Dennis Sharkey, Elkhart County Council vice president, expressed concern about the "double whammy" of tightening property tax caps and the likely dip in the assessed valuation of land brought on by the tough real estate market. Taken together, they'll likely create a shortfall in property tax revenue, he warned at the council's budget session Wednesday, the last before adoption today of the county's 2010 spending plan.

With that in mind, he asked State Rep. Tim Neese, R-Elkhart, on hand for Wednesday's meeting, if the caps -- limits on the property taxes individual property owners must pay -- could be frozen for a year. They were set at 2 percent of a home's assessed valuation for 2008, dropped to 1.5 percent for 2009 and are to fall to 1 percent next year. Delaying the final planned reduction, at least, would let locals gauge the impact of the latest dip on their ability to raise revenue.

Council President John Letherman also called the caps into question, labeling them a "self-inflicted wound."

State lawmakers suggested an increase in the local option income tax as a remedy to offset losses brought on by caps, which they adopted last year as a means of reducing the tax burden on homeowners. With unemployment here so high, however, "taxing people that aren't working doesn't help either," Letherman said.

The county officials' concern seems to be more about tax inflows in 2011 and beyond. The 2010 budget is already crafted.

Indeed, Letherman said the 2011 spending plan "looks to be a disaster" given all the expected reductions in tax revenue.

Other officials have made similar pitches for delays in implementation of the final planned dip in property tax caps, thus far without success. But Neese told the officials Wednesday that, yes, a delay conceivably could happen, and that he'd investigate the possibility.

As for the county's 2010 budget, all the numbers have been balanced -- spending should be down compared to 2009 -- but county officials won't reveal the figures until its planned adoption today. That takes place at 4 p.m. at the Elkhart County Administration Building, 117 N. Second St., Goshen.

But here some of the estimates. Overall 2010 spending will likely settle at around $81.4 million, down from the original 2010 proposal of $84.62 million and the original 2009 spending plan of $87.41 million. However, perhaps $2 million will be sought early next year to help cover county employees' health costs, effectively boosting 2010 spending up to $83.4 million.

County Auditor Dave Hess estimates the county will need around $32 million in property tax revenue in 2010, up from $31 million for 2009.


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