There was this delusion I had this past spring after wrapping up a multi-part series and a few commentaries about property taxes that I was finished. “Doh!” as Homer Simpson would say. The issue evolves. Or devolves. Not sure.
So, another entry in the ongoing saga …
County Council will hold its formal budget hearing on Sept. 6. One of their considerations is how the property tax credits will be allocated utilizing a new format with the state. I received several questions from readers about what exactly came out of the council’s discussion with a consultant — Darren Gates — at an early August budget meeting.
The process is inherently complicated, so don’t feel like the Lone Ranger if you’ve been wondering as well. To listen to that consultant you would get the distinct impression that the state is doing that on purpose. I don’t think so, but I am getting a bit ahead of myself.
The questions I heard were:1) Exactly what did the council vote to do? and 2) How will this impact the shares of property taxes levies, specifically the share that residential properties will pay? (A reminder: residential property taxpayers’ share of the total tax levy has increased dramatically over the past five years. See the Saturday, Aug. 6, Opinion Page for details.)
The discussion was all about the form the county submits to the state to direct them on how to allocate the local income taxes collected and then applied to different county accounts, including the property tax credits that have so kindly lowered residential property tax bills since about 2008. Our investigation this spring initiated a review by the state auditor who discovered Wells County was among a handful of counties around the state that had not updated their forms to accommodate a legislative change in 2017. With me so far?
The discussion and decision reported Aug. 6 was to adopt that new form and then allocate the them to property tax credits. Long story short: the council voted to keep the property tax allocations as close as possible to the old formula. That is significant because the consultant, Mr. Bates, made a strong argument for the council to discontinue all property tax credits now. From our Aug. 6 story about that meeting:
While not technically increasing tax rates, affected property owners would be paying more.
“Yes, you’re going to take a hit from the homeowners (who) are going to be upset about it, but you’ve got to pay your bills,” Bates said.
Multiple council members expressed that they would be open to the idea later, but it didn’t seem like the best timing given the current economic climate.
“I know we’ve had a lot of property increases and bills — I just hate to rip this (band-aid) off now,” council member Seth Whicker said.
So they didn’t. Homeowners can thank them, at least for now.
Bates’ argument is that council is not properly managing their cash flow and the state is going to eventually eliminate property tax credits anyway. He has helped other counties eliminate property tax credits and says, by his analysis, Wells County is losing $130,000 every year by not properly utilizing the state’s “buckets” and by not eliminating property tax credits.
He even said that the Department of Local Government Finance purposefully makes the process confusing: “They’ve been trying to do everything they can to make you look stupid and blame it all on you.” Wow. That’s quite a statement. I find that hard to believe having talked to a number of those people in Indy several times. Wells County Auditor Lisa McCormick has also always found them helpful. But I digress.
The bottom line: at least for now, residential property tax credits are still in place; nonetheless, you can almost assuredly count on another increase in your property tax bill next year — the percentage increase will be largely impacted on how much your assessment went up. Down the road, however, it may be an entirely different story. Not only is council open to the recommendations of Bates (which I understand and, frankly, are logical), but they may also have no say in the (projected) disappearance of the property tax credits.
I do have a number of new questions raised during this year’s budget process. The data to answer those questions are, I believe, available somewhere online — you just have to figure out where to look.
My delusion of being finished remains.
miller@news-banner.com
