Tim Vandenack
Tim Vandenack
In Indiana Buzz, reporter Tim Vandenack blogs on politics, immigration, elections, taxes, errant geese and more.

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County Buzz: Who loses what due to property tax caps

Posted on Nov. 17, 2008 at 12:00 a.m. | Updated on Nov. 17, 2008 at 2:41 p.m.

House Enrolled Act 1001, the property tax relief plan approved by state lawmakers last spring, puts stricter caps on property taxes paid by different classes of property owners. That's good for homeowners, theoretically, who are meant to be the beneficiaries of the change. Going forward, the caps and other changes in HEA 1001 will likely result in reductions in their property tax bills, the taxes they pay based on the value of their homes.

But it appears the varied changes, notably the caps, will likely put strains on many local governmental units, correspondingly reducing the amount of property tax revenue coming in to help pay for the services they provide. Indeed, such reductions could necessitate cuts in services, layoffs, hiring freezes and new fees as impacted cities, towns, school districts and other entities scramble to make up for their shortfalls. The city of Elkhart is particularly hard hit.

Elkhart County contracted H.J. Umbaugh and Associates to help break down the issue here in Elkhart County and following are their estimates, using planned 2009 budgets as the basis for 2010 projections. The biggest hit comes in 2010 and listed are those entities expected to lose more than $10,000 that year.

Taxing entity              Loss of property     Loss of property
                                    tax revenue due      tax revenue due
                                    to caps, 2009           to caps, 2010

City of Elkhart            $1,450,738               $4,637,244

Elkhart schools            1,014,306                 3,036,743

Elkhart County                 487,108                1,949,905

Concord schools             209,898                 1,304,640

Goshen schools              304,990                 1,287,657

City of Goshen                 284,407                 1,265,788

Wa-Nee schools               134,869                    611,147

City of Nappanee              118,871                   484,135

Elkhart libraries                121,731                   425,779

Middlebury schools           11,051                   239,513

Concord Township            19,839                   154,596

Goshen libraries                27,660                   122,869

Town of Middlebury             5,530                   107,179

Nappanee libraries             25,117                   102,613

Town of Wakarusa               5,623                     70,357

Middlebury Township          2,823                     61,434

Town of Bristol                           0                      43,314

Fairfield schools                  2,652                      34,521

Town of Millersburg             1,805                     23,043

Elkhart Township                 3,473                     15,268

Baugo schools                            0                     12,184

Osolo Township                      404                     10,578

The property tax caps limit homeowners' property taxes to 1.5 percent of their homes' assessed valuations in 2009 and 1 percent in 2010. For instance, taxes on a home valued at $100,000 in 2010 couldn't exceed $1,000. The limits are 2.5 percent and 3.5 percent in 2009 for rental units and commercial property, respectively, then fall to 2 percent and 3 percent.

Property taxes are just one source of revenue, though a notable one, that government taps to help pay for its operations. Income taxes and fees are other sources, as well as sales taxes at the state level.


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