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INDIANAPOLIS – Homeowners in Huntington and Adams counties will be among the first in the state to see significant property tax relief on their 2008 bills.
Ryan Kitchell, head of the Indiana Office of Management and Budget, shared data from county abstracts filed with the state that show property tax revenue to be collected from homesteads is down 49 percent in Huntington County from 2007 and 21 percent in Adams County.
This is a reduction in the overall pot of property tax money paid by Hoosiers’ on their primary residences and does not mean each homeowner will see that exact cut.
“That is as indicative as we can get at this early stage,” Kitchell said. “But it is very encouraging.”
Only five counties right now are far enough along in the process to gauge the effect. The drop is attributable to $870 million in state revenue that Gov. Mitch Daniels and legislators added to a state homestead credit.
More than $600 million of that money comes from an increase in the state sales tax rate from 6 percent to 7 percent that Hoosiers have been paying since April 1. And about $250 million was from licensing fees paid by two horse tracks to open casinos.
“We keep wondering if what we are seeing is right. We want to pinch ourselves,” said Huntington County Treasurer Cindy Yeiter, who started printing the 2008 property tax bills over the weekend. “Anyone with a homestead exemption will like their bill.”
She noted that there is twice the amount of work this year because counties also have to print a comparison statement to show taxpayers the exact difference in the 2008 tax bills compared to 2007 and point out the state relief.
Yeiter said the county’s expected due date for the first installation of tax payments will be July 21.
Over in Adams County, the 21 percent cut is less than originally estimated by state fiscal analysts.
Kitchell said that is because of a 339 percent increase in the tax rate for South Adams Community Schools’ debt service fund.
The district last year received approval for a $25 million project that will renovate the high school and provide new space for kindergarten through eighth grades, allowing the district to move students from aging buildings in Berne and Geneva to one consolidated campus.
Adams County Auditor William Borne said he expects property tax bills to be out in a few weeks, with the due date for the first installment being July 3.
So far, no counties report any effects from the tax caps legislators passed. Right now, the cap is set at 2 percent but has several loopholes.
By 2010, homeowners’ property tax bills will be limited to 1 percent of their assessed value, not including construction projects approved in a referendum. If so, the taxpayer would receive a credit and local government would lose money.
In some areas, taxes will start to rise again next year when state officials reduce the homestead credit and instead take over welfare and school general fund costs that are currently paid through property taxes.
nkelly@jg.net
