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As state and county officials prepare to send property tax rebate checks to Hoosier homeowners, two conclusions are becoming increasingly clear:
•Homeowners in Allen County and some other parts of the state are unlikely to receive their checks by the end of the year.
•Choosing rebates over tax credits was a bad idea, made even worse by lawmakers’ failure to consider how the timing and mechanics would affect the local officials who have to mail the rebate checks.
The budget and property tax law the General Assembly adopted this year provided for $300 million in property tax relief for 2007 and $250 million for 2008 financed by licensing fees for slot machines at the state’s two horse-racing tracks.
Indiana House Democrats led by House Speaker Patrick Bauer of South Bend insisted that this year’s relief come in the form of rebate checks that were supposed to go out near the end of the year. Next year’s relief will be in the form of tax credits that will reduce tax bill amounts.
Allen County homeowners may not see their checks until March, County Auditor Lisa Blosser said. “There’s just no way they’ll be done by the end of the year,” she said. “We’re going to do everything we can to get these checks out as soon as possible. We want to get them in the hands of taxpayers.”
In addition to myriad calculations involving state and local officials, county treasurers must check the rebate list for past-due taxes and deduct any delinquencies and penalties from each amount before sending that information back to the county auditor, who sends out the checks. That process may not take all that long in Whitley County, which has 9,600 homestead properties. It will take a lot longer in Allen County, which has 90,000.
State Sen. Luke Kenley, R-Noblesville, who chairs a state commission researching property taxes and alternatives, believes most checks won’t go out until early spring. He unsuccessfully proposed an alternative that would have resulted in checks going out in November. Longer delays face counties where the state has ordered new assessments. In Marion County, rebates may not arrive until June or July, State Auditor Tim Berry said.
County officials must perform all this work at one of their busiest times of the year, when they are collecting the fall installments of taxes, working on rather substantial year-end reports and calculations and deeply involved in preparing next spring’s taxes.
County and many state officials agree that the tax relief would have been much easier – and better for taxpayers – if it had come in the form of tax credits. The rebates were driven by House Democrats and leader Bauer, who seemed enamored with the idea of sending checks to homeowners – and taking credit for it. By law, the auditor must send a letter along with the checks stating: “A portion of your local property taxes due in 2007 are being refunded due to tax relief provided by the Indiana General Assembly. Your refund is in the amount of $___ (insert amount of refund).”
And how much will those rebates be? Some officials had thrown around the figure of 15 percent of the tax bill; legislative staff estimated the average amount at $240. But at this point, with so many unanswered questions, no one really knows.
As the rebate plays out, the process serves as a reminder that property taxes involve county auditors, county treasurers, county and township assessors, elected boards that levy taxes, and several state agencies.
“It’s a delicate balance,” Berry notes. The legislature’s action seemed to disregard the hows and whens of the rebate.
The bottom line: For many homeowners, $300 million in property tax relief that lawmakers intended for 2007 will not arrive until weeks or months into 2008.
