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Taxing units estimated to lose less than earlier thought

The impact of state-mandated property tax caps in 2011 won't be as dramatic in Elkhart County as earlier estimated, according to the Indiana Legislative Services Agency. More specifically, the county, cities, school districts and other Elkhart County taxing units will lose $1.84 million less in property tax revenue than earlier thought due to the new caps, according to the estimates released Monday.
Posted on Oct. 7, 2009 at 1:00 a.m.

The impact of state-mandated property tax caps in 2011 won't be as dramatic in Elkhart County as earlier estimated, according to the Indiana Legislative Services Agency.

More specifically, the county, cities, school districts and other Elkhart County taxing units will lose $1.84 million less in property tax revenue than earlier thought due to the new caps, according to the estimates released Monday.

Losses brought on by the limits have generated apprehension among some city, county and school officials, worried how they'll make up for property tax funds lost because of the change.

The LSA numbers still lag far behind estimated dips in property tax revenue here released last February by the county's accountant, Plymouth-based Umbaugh and Associates.

An LSA report, also released Monday, indicates that the tighter property tax caps, implemented by state lawmakers in 2008, had a limited impact on reducing homeowners' property tax bills this year, one of the key goals.

Here are some highlights of Monday's data:

* The overall estimated dip in property tax revenue among all Elkhart County taxing units because of caps will reach $7.63 million in 2010 and $9.93 million in 2011. LSA's February estimates put the estimated dip next year at $7.42 million and $11.77 million in 2011. Umbaugh estimates property tax revenue will fall by $15.06 million in 2010 and $17.31 million in 2011.

* The city of Elkhart, Elkhart County and Goshen will be among the hardest-hit taxing units in 2011, seeing dips of $3 million, $1.16 million and $915,732, respectively, according to the LSA. Those numbers are a bit lower than the LSA figures from March and much lower than Umbaugh's estimated dips, $4.89 million, $1.78 million and $1.26 million, respectively.

* Among 68 Indiana counties analyzed by the LSA, owners of rental housing have been the biggest beneficiary of the new tax caps this year, holding on to 82 percent of funds that otherwise would have been collected as property taxes without the new limits. Homeowners accounted for just 3 percent of the total, according to the analysis, which didn't include Elkhart County.

* Homeowners have accounted for such a small percent of the property tax revenue saved due to caps in part because they can tap into homestead deductions that already reduce their burden.

* At any rate, homeowners are seeing their bills go down, according to the LSA. Homeowners' bills in the 68 counties fell 3.3 percent on average this year from last year. For 95.5 percent of those homeowners, bills fell 32.2 percent on average this year.

The caps limit property tax bills for homeowners to 1.5 percent of their home's assessed value this year, dipping to 1 percent starting next year. The cap for rental property is 2.5 percent this year and 2 percent next year, while the limit for commercial and industrial property is 3.5 percent his year and 3 percent starting in 2010.




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