July 23, 2014 at 2:10 p.m.
Local property tax impact driven by capital projects (07/31/07)
By By TRAVIS MINNEAR-
Property tax increases in Jay County are in line with the rest of the state, but a local official says capital improvements - not excessive spending - are the driving force.
County Auditor Freda Corwin said Jay County homeowners have experienced an average jump of 24 percent in property tax rates, but most of the increase has come from payments due on bonds for renovating Jay County High School.
"I think our county is pretty stable compared to others," Corwin said, adding that without the bond issue rates would have been about 7 percent higher than last year.
Four percent of the hike comes from "normal growth," she said, which is common in counties statewide and essential to maintain services.
Projected average property tax rate increases across the state also are 24 percent, according to the Indiana Department of Local Government Finance.
From 2006 to 2007, property tax revenue in Jay County rose by $2,345,273.04, according to information obtained by The Commercial Review. During that time an average of 52.5 percent of the $43,044,987.40 collected has been used to fund schools.
"The large majority of increase across Jay County (in) all the taxing units was driven by schools," said State Rep. Bill Davis, R-Portland.
Meanwhile, in the last five years county government spending increased $2,562,944.06. The county's budget grew from just under $10 million in 2003 to more than $12.5 million in 2007.
There also are factors outside of school bonds contributing to the jump in property taxes, Jay County Assessor Anita Mills said. They include eliminating a business inventory tax, which has shifted a larger burden to property owners, and a practice called trending. This estimates how much property values have increased since 1999.
Corwin said dropping the business inventory tax has added a significant burden to homeowners.
Jay County chose to drop the tax last year, one year before required by the state, she said. That shifted responsibility for taxes on a total net assessed value of more than $56.2 million from businesses to homeowners last year, with similar results this tax season.
Davis said ending the tax wasn't all bad because it has stimulated economic growth in Indiana.
"I think it's making an impact because we're creating jobs across the state in industries that we couldn't reach before," he said.
"Because of a tax that taxed people on their inventory, we've lagged behind. We're starting to see that turn around."
Higher property tax bills also have led to more appeals this year than normal, Mills said. Fifty-two appeals have been filed with the assessor's office.
She said appeals can slow property tax payments and threaten to take revenue away from the county.
"It just shoots the budget all to pieces," Mills said.
Steve Feathers of Portland said he filed an appeal for one of his rental properties, because of alleged discrepancies in its assessed value.
Feathers said he purchased the house, located on East Walnut Street, Portland, three years ago from a real estate agency for $30,000. It recently received an appraised value of more than $54,000 from the assessor's office.
The increased appraisal pushed property tax assessments on the house from the neighborhood of $160 every six months to more than $600, he said.
"I had a beef with it," Feathers said. "I thought it was way, way too high.
"I just didn't think it was fair that they jumped these taxes up," Feathers said.
Higher property taxes could also make selling real estate more difficult, Feathers said. "If you were a potential buyer and we showed you the tax sheets, I think you would walk right out the door."
Assessment discrepancies in other parts of the state have prompted Gov. Mitch Daniels to order property countywide tax reassessments in Marion, Posey, Gibson and Delaware counties.
DLGF spokeswoman Michele Brackemyre noted that countywide reassessments are very uncommon in Indiana.
"This is definitely a special situation," she said.
Mel Smitley, also of Portland, said he would support reassessments in Jay County. He said that he acquired a home on Ind. 26 in Portland a year and a half ago for about $50,000.
The property was assessed this year for nearly $70,000, according to statistics from the Jay County assessor's office.
"To me, a lot of these properties are grossly over assessed," Smitley said.
In an attempt to help provide long-term property tax relief, Jay County Council took the state's advice and increased local income tax rates earlier this month. The rate will increase from 1.5 percent to 2.6143 percent on Oct. 1. That will raise an estimated $1.4 million in property tax relief, according to the auditor's office.
The county income tax rate is scheduled to dip to 2.4 percent on Oct. 1, 2008.
In theory, Davis said, the income tax jump at the local level should help offset limited distribution of homestead credits in coming years and redistribute money to homeowners.
He said the income tax increase is a good step by the county to help combat rising property taxes. But, Davis added, the state will have to create a final solution for the property tax crisis, which has been one of the most hotly contested issues during his three years in the General Assembly.
"All government needs to be more efficient with taxpayer dollars, and we need to find a better way than the one that we have now," he said.
"It's not a fair tax anymore. It needs to be our No. 1 priority."[[In-content Ad]]
County Auditor Freda Corwin said Jay County homeowners have experienced an average jump of 24 percent in property tax rates, but most of the increase has come from payments due on bonds for renovating Jay County High School.
"I think our county is pretty stable compared to others," Corwin said, adding that without the bond issue rates would have been about 7 percent higher than last year.
Four percent of the hike comes from "normal growth," she said, which is common in counties statewide and essential to maintain services.
Projected average property tax rate increases across the state also are 24 percent, according to the Indiana Department of Local Government Finance.
From 2006 to 2007, property tax revenue in Jay County rose by $2,345,273.04, according to information obtained by The Commercial Review. During that time an average of 52.5 percent of the $43,044,987.40 collected has been used to fund schools.
"The large majority of increase across Jay County (in) all the taxing units was driven by schools," said State Rep. Bill Davis, R-Portland.
Meanwhile, in the last five years county government spending increased $2,562,944.06. The county's budget grew from just under $10 million in 2003 to more than $12.5 million in 2007.
There also are factors outside of school bonds contributing to the jump in property taxes, Jay County Assessor Anita Mills said. They include eliminating a business inventory tax, which has shifted a larger burden to property owners, and a practice called trending. This estimates how much property values have increased since 1999.
Corwin said dropping the business inventory tax has added a significant burden to homeowners.
Jay County chose to drop the tax last year, one year before required by the state, she said. That shifted responsibility for taxes on a total net assessed value of more than $56.2 million from businesses to homeowners last year, with similar results this tax season.
Davis said ending the tax wasn't all bad because it has stimulated economic growth in Indiana.
"I think it's making an impact because we're creating jobs across the state in industries that we couldn't reach before," he said.
"Because of a tax that taxed people on their inventory, we've lagged behind. We're starting to see that turn around."
Higher property tax bills also have led to more appeals this year than normal, Mills said. Fifty-two appeals have been filed with the assessor's office.
She said appeals can slow property tax payments and threaten to take revenue away from the county.
"It just shoots the budget all to pieces," Mills said.
Steve Feathers of Portland said he filed an appeal for one of his rental properties, because of alleged discrepancies in its assessed value.
Feathers said he purchased the house, located on East Walnut Street, Portland, three years ago from a real estate agency for $30,000. It recently received an appraised value of more than $54,000 from the assessor's office.
The increased appraisal pushed property tax assessments on the house from the neighborhood of $160 every six months to more than $600, he said.
"I had a beef with it," Feathers said. "I thought it was way, way too high.
"I just didn't think it was fair that they jumped these taxes up," Feathers said.
Higher property taxes could also make selling real estate more difficult, Feathers said. "If you were a potential buyer and we showed you the tax sheets, I think you would walk right out the door."
Assessment discrepancies in other parts of the state have prompted Gov. Mitch Daniels to order property countywide tax reassessments in Marion, Posey, Gibson and Delaware counties.
DLGF spokeswoman Michele Brackemyre noted that countywide reassessments are very uncommon in Indiana.
"This is definitely a special situation," she said.
Mel Smitley, also of Portland, said he would support reassessments in Jay County. He said that he acquired a home on Ind. 26 in Portland a year and a half ago for about $50,000.
The property was assessed this year for nearly $70,000, according to statistics from the Jay County assessor's office.
"To me, a lot of these properties are grossly over assessed," Smitley said.
In an attempt to help provide long-term property tax relief, Jay County Council took the state's advice and increased local income tax rates earlier this month. The rate will increase from 1.5 percent to 2.6143 percent on Oct. 1. That will raise an estimated $1.4 million in property tax relief, according to the auditor's office.
The county income tax rate is scheduled to dip to 2.4 percent on Oct. 1, 2008.
In theory, Davis said, the income tax jump at the local level should help offset limited distribution of homestead credits in coming years and redistribute money to homeowners.
He said the income tax increase is a good step by the county to help combat rising property taxes. But, Davis added, the state will have to create a final solution for the property tax crisis, which has been one of the most hotly contested issues during his three years in the General Assembly.
"All government needs to be more efficient with taxpayer dollars, and we need to find a better way than the one that we have now," he said.
"It's not a fair tax anymore. It needs to be our No. 1 priority."[[In-content Ad]]
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