ELKHART -- The state denied Elkhart Public Library's $13.85 million bond Tuesday, ending the library's hope of building two new branches.
Elkhart County Commissioner Mike Yoder said the state's refusal doesn't surprise him. Commissioners and members of the Elkhart County Council had expressed reservations about the library plans, concerned about the impact of the proposed bonds on taxpayers.
Indiana homeowners have been demanding lower property taxes, Yoder said, also noting caps in the reform plan approved last week by state lawmakers that limits local taxing entities' ability to levy property taxes.
"That means things have to get cut," Yoder said. "It's a different world."
But Connie Ozinga argues the library's bond was crucial because the two branches at Osolo and Pierre Moran are "badly outgrown." Some nights all the chairs are filled and students study on the floor, said Ozinga, director of Elkhart Public Library system.
"They are very tiny buildings -- they're completely full," she said. "For every book we buy, we need to remove one to have room to store it."
Earlier, the library changed its bond request, cutting it down to $5.7 million to build just a new Pierre Moran branch. For an owner of a $100,000 house in Elkhart, it would have cost about $14.63 more each year in property taxes, where the library's original plan would've been about $36.35 more per year.
But in February, the Elkhart County Council didn't support the slimmer project either because council members were worried about taxpayers' anger over property taxes.
The Indiana Department of Local Government Finance rejected bonds for both amounts Tuesday.
Because of the new property tax reform plan, Ozinga said she's concerned about the library's financial future, especially since the current Pierre Moran branch needs a new roof.
The library could face a $275,000 reduction on its operating tax levy by 2010, Ozinga said. She said there's also uncertainty about what happens to the library capital projects fund, which runs about $400,000 annually.
Going forward, the Elkhart library system may not be alone. In light of the reform plan, which Gov. Mitch Daniels signed Tuesday, Yoder suspects library and parks systems everywhere will be the first to feel the effects of moves to rein in property tax spending.
"This is what taxpayers wanted -- caps, lower property taxes," Yoder said.