Chesterton Tribune



County government takes $2 million hit from property tax caps

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Porter County Government is expected to lose $2.008 million in property tax money, according to the Indiana Department of Local Government Finance annual report of tax cap impacts released last week for 2014.

The General Fund, which is supported chiefly by property tax, is expected to see the sharpest loss, $1.87 million. Other budgets affected are 2015 reassessment, cumulative bridge, jail lease rental, and the cumulative capital development funds.

The total loss was higher in 2013 at $2.048 million, but that is because the health department fund was included then as an additional item. The hit to the General Fund last year was $1.6 million, a difference of about $270,000.

The County Council has already been advised it will need to close a $5 million gap in the budget for this year and an $8 million hole for next.

The County’s budget specialist Vicki Urbanik told the Council in an email that the General Fund budget at this fall’s budget hearings will “be very tight” starting out “with no real room” for increased appropriations. The budget’s certified levy stands at $32.3 million, but $35.8 million is the total for the adjusted budgets.

Urbanik said the budget is also set to absorb various costs that have not been appropriated such as the sheriff’ pension expenses of nearly $840,000. She said miscellaneous revenues not part of the General Fund will need to come in higher by at least $100,000 depending on how much the spring and fall property tax draws bring in. Revenues are up this year compared to last “which may be a good sign,” Urbanik said.

But what may be the biggest challenge for the Council this year is to come up with funds to balance the County health insurance plan. The shortfall began at $2.5 with the 2014 adopted budget last fall and worsened by $2.8 million when the state made its cuts, Urbanik said.

County Council member Jim Biggs, R-1st, told the Chesterton Tribune he believes the County does not have a revenue problem, but rather “a spending problem.”

Biggs said he plans to propose putting a freeze on new expenditures during the Council’s meeting tonight at 5:30 p.m. in the County Administration Building.

The Council has already put a freeze on new hires for County Departments and has sent letters to department heads asking them to keep an eye out for ways they can reduce spending this year.

Countywide Impact

The DLGF report shows that the countywide total of losses due to tax caps is $12.38 million for 2014, up from $12.0 million in 2013.

The Duneland School Corpora-tion will experience a loss of $716,000, most of which will be coming out of its Capital Projects fund. The figure is however less than the total last year of $1.031 million which was because of a change in the tax rate for debt service.

The Town of Chesterton’s loss is expected to be $543,465 with a $396,849 drop in the general fund due to the caps.

The Porter Town budget will be shorted $273,324, according to the DLGF.

However, there are some units that are not feeling the crunch as much or at all: Westchester Twp. ($3,444); Liberty Twp. ($3,097); Dune Acres ($2,754); Jackson Twp. ($357); Pine Twp. ($6); Burns Harbor ($6); Pine Civil Town ($.16) and Beverly Shores ($0).

Urbanik said the reason towns like Burns Harbor and Beverly Shore are seeing minimal impacts is because their tax rates are so low that practically no one in their boundaries is hitting the tax cap. Areas with higher assessed property values generally have low tax rates, she said.

In Indiana, homestead properties are capped at 1 percent, rental properties and agricultural land are capped at 2 percent, and non-residential property or commercial is capped at 3 percent.

For 2014, the County saw $5.5 million of circuit breaker credits from properties capped at 1 percent, $6.7 million for those at 2 percent and $50,881 for those at 3 percent, meaning more properties are hitting the circuit breaker at the 1 and 2 percent caps.

The tax caps became a permanent fixture of Indiana’s constitution after the 2010 elections.

“This is an issue that is not going to go away,” Urbanik said.

The state impact report is at



Posted 4/22/2014




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