Numbers show property tax revenue on the decline in Elkhart County, tax cap losses rising

A review of available date confirms that cities, schools and other taxing units are getting less and less property tax revenue as tax caps take a bigger and bigger bite. It's got many officials worried.
Posted on March 26, 2013 at 1:00 a.m.

ELKHART — The hand-wringing by local officials in Elkhart County over declining property tax revenue isn’t for nothing.

A review of the data confirms — the cities, schools, towns, libraries and townships here, by and large, are making do with less property tax revenue. Between 2010 and 2012, property tax funding going to 25 of the 37 taxing units here fell, according to tax distribution reports compiled by the Elkhart County Auditor’s Office.

At the same time, losses due to property tax caps — the cause for the declines — steadily increased between 2010 and 2012 in 34 of 37 taxing units, most notably the city of Elkhart. Relief isn’t coming in the near term — tax cap losses are expected to grow in 2013, again for 34 taxing units, according to estimates compiled by accounting firm Umbaugh & Associates.

Most local leaders thought losses due to tax caps would peak in 2012 and then ease off, said Elkhart Mayor Dick Moore. They haven’t, though. In part due to reduced assessed valuations of Elkhart County property, the Umbaugh estimates show losses growing for 2013 and Moore worries it could be even worse in 2014 and 2015, increasing the pressure to cut spending.

“We think we can get through 2013 all right,” said Moore. “I can’t answer yet for 2014.”

Just last Saturday, March 23, Elkhart Community Schools Superintendent Robert Haworth, speaking to a group of state lawmakers, voiced his concern about declining funding to cover busing, urging action to offset the losses. “This is a 2013 issue. It’s happening right now,” Haworth said.

Officials from Elkhart County, Goshen and the Goshen and Concord school districts have also been vocal over the situation, concerned about the impact to service offerings, jobs even. Cutting fat — part of the aim with tax caps put in place by lawmakers in 2008 — is one thing. But the losses due to the caps potentially put vital service offerings in harm’s way, some fear.

“I don’t know what else to do,” said John Letherman, president of the Elkhart County Council, which oversees funding for Elkhart County. The county has already scaled way back on non-personnel expenses and, echoing past comments, Letherman indicated that elimination of jobs may have to get closer and closer scrutiny.

Even if they’re managing, officials at other taxing units — like Deborah Stewart, director of the Elkhart Public Library — say they’re feeling the pinch.

“We’re holding our own,” said Stewart, noting cuts in operational hours, staff reductions through attrition and other cost-cutting measures implemented in recent years to offset property tax losses. “I don’t know how many more years we’ll be able to do that.”

The 37 taxing entities that get property tax revenue here include Elkhart County, the three cities here, four cities, seven school districts, six library systems and 16 townships. Property taxes aren’t necessarily the only funding source, but they’re major and in most instances, they’re the single largest pool of money.


According to the data, the city of Elkhart, in dollar terms, has been one of the hardest hit by property tax losses. The Elkhart, Goshen and Concord school districts, too, have also lost big.

Property tax revenue figures came from certificate of tax distribution reports provided by the Elkhart County Auditor’s Office. Tax cap losses came from a mix of sources — the state of Indiana’s Legislative Services Agency and the county auditor’s office provided 2010, 2011 and 2012 numbers while Umbaugh provided the 2013 estimates.

Here’s a look at some of the highlights from the data, rounding the numbers:

Ÿ Among the 37 taxing units in Elkhart County, actual overall property tax revenue received fell from $189.1 million in 2010 to $173.4 million in 2012, an 8.3 percent decline.

Ÿ Losses due to tax caps by the 37 units increased from $12.7 million in 2010 to $27.9 million in 2012 and Umbaugh expects them to reach $37.3 million in 2013.

Ÿ Elkhart generated $29.4 million in property tax revenue in 2010 and $26 million in 2012, a loss of nearly 12 percent. Losses to tax caps, accounted for in the figures, totaled $4.5 million in 2010, grew to $8.5 million in 2012 and are expected to reach $10.7 million in 2013.

Ÿ Elkhart Community Schools generated $33.5 million in property taxes in 2010 and $29.3 million in 2012. Losses to tax caps reached $1.8 million in 2010, grew to $4.8 million in 2012 and are expected to increase to $6.3 million this year.

Ÿ Five of Elkhart County’s seven school districts sit in the top 10 among Elkhart County’s 37 taxing units in terms of tax cap losses. School systems get much of their funding for personnel from the state, but rely on property taxes for transportation, busing and capital costs, among other things.

Ÿ Both Elkhart County and Goshen held relatively steady in 2010 compared to 2012 in terms of property tax revenue generated, despite sizable dips in 2011.

Ÿ Without tax caps, the city of Elkhart theoretically would have generated $34.5 million in property tax revenue in 2012 instead of the actual number, $25.9 million. Elkhart schools would have generated $34.1 million instead of $29.3 million. Goshen would have generated $14.3 million instead of $11.7 million.


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