Meeting on tax changes set for Tuesday

Changes to agricultural tax rate assessment may have a major impact on Jay County.

Officials from Jay County, Jay School Corporation, Portland and Dunkirk will meet Tuesday evening to find out how Indiana Senate Bill 308 will affect their tax collections. The public meeting with accounting firm Umbaugh and Associates is scheduled for 6 p.m. in the Jay County Courthouse auditorium.

Umbaugh and Associates will present the findings of a study that examines the impact agricultural tax rate changes will have on county and municipal tax revenues. The four local entities collaborated to fund the $10,000 study, each contributing $2,500.

The study will examine the impact of Senate Bill 308, signed into law in March 2016, and how the changes to the formula for calculating base tax rates on agricultural will inversely affect homestead and business property taxes.

The concern was publicly raised during a presentation in March by Purdue University agricultural economist Larry DeBoer, who cautioned that heavily agricultural counties like Jay could see a spike in home and business property tax rates. That spike could see businesses and homeowners in Portland and Dunkirk hit their state-mandated “circuit-breaker” tax caps — 1 percent for homeowners, 2 percent for rental properties and 3 percent for businesses. DeBoer said that could lead to a significant loss in tax revenue for the municipalities and the school corporation.

This year, Portland already lost $129,731.71 in tax revenue — 3.9 percent of its total levy — as a result of state circuit-breaker tax caps. In Dunkirk, the circuit breaker losses will total $80,898 from a levy of $953,249.

DeBoer said the main impact of the tax changes hasn’t yet struck rural counties. He estimated that 2019 through ’21 are likely the years that tax revenues will take a hit from the changes and resulting tax revenue consequences.