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Tuesday, October 25, 2005

Ind. Gov't. - Property tax hike coming

"Property tax hike coming: State budget changes, rising costs create ‘perfect storm’ for increases" is the headline to an AP story today by Mike Smith, published today in the Fort Wayne Journal Gazette and several other state papers. (Part 1 was published yesterday.) Some quotes from today's story:

“Hoosiers will feel it. I wish it wasn’t so,” state Rep. Jeff Espich of Uniondale, the fiscal leader for House Republicans, told the full House on the final day of the last legislative session.

The expected increases stem from a chain of events, including changes in the state budget and enhanced state efforts to protect children, that Espich calls “the perfect storm.” * * *

How much more property owners pay will depend on where they live, the makeup of the property tax base and how much local governments increase taxes.

State Budget Director Chuck Schalliol has suggested statewide average increases of 5 percent to 8 percent for homeowners, but he acknowledged they would go higher if a new assessment rule the administration supports goes into effect.

Others say statewide property tax increases could top 10 percent or more in each of the next two or three years, and former Senate Finance Chairman Larry Borst, who was a top architect of tax policy for three decades, predicts 15 percent to 18 percent increases for some.

Democrats blame much of the expected increases on the two-year budget passed by Republicans who control the General Assembly and signed into law by Republican Gov. Mitch Daniels.

The budget caps state-provided property tax relief payments that used to automatically rise as local property taxes did. That will save the state $436 million over two years, Purdue University economist Larry DeBoer estimates, but it will be money property owners pay.

School spending also will play a role. The budget provided increases for schools of 1.2 percent the first year and 1.3 percent the second. Those increases rely heavily on schools raising property taxes.

The budget also allows schools to further raise property taxes to provide textbooks to low-income students, recoup state cuts for transportation and pay for utility and insurance costs.

Espich said the budget was only a small part of the equation.

The story includes several side-bars.

[More] The Evansville Courier& Press has an editorial today that begins:

Thirty years of moving tax money around between state and local governments are finally catching up with Indiana. Now, with Gov. Mitch Daniels and the Republican-controlled Legislature cutting back sharply on state aid to taxpayers and local government, the burden is shifting dramatically to those local taxpayers.

It's something of a near-perfect storm that's bearing down on Hoosiers taxpayers, one that could see significant increases in property taxes, new local taxes and cuts in local government spending.

Posted by Marcia Oddi on October 25, 2005 05:58 AM
Posted to Indiana Government