Property tax increase might already be resolved, economist says

Despite what many Indiana home owners may think, a lot has already been done by local government to resolve the property tax increase from this summer.

That's according to Larry DeBoer Jr. of the agricultural economics department at Purdue University, who spoke at the 2007 Annual Extension Advisory Council meeting Thursday night.

The $300 million tax relief provided by the government for this year, as well as the $250 million for next year hasn't taken effect, leading to homeowners continuing to express the unhappiness that accompanied the tax increase, he said.

The average homeowner tax increase should also decrease from 24 percent to 8 percent because of end-of-year rebates, DeBoer said.

The correct assessment of a property's value is really a correct prediction, DeBoer said.

There are two reasons why property taxes increased this summer, he said.

First, the last 51 counties eliminated their inventory tax this year. If inventory owners aren't paying, someone else has to.

The other reason is trending. The state Supreme Court said assessments must be kept close to property selling prices, DeBoer said. Those prices change every year, which results in assessments needing to be adjusted. Items taxed were changed from business equipment to land, buildings and homes.

He also said when comparing to other states, Indiana's property tax isn't too bad.

Indiana ranks 37th in the country in property tax with its median homeowner property in 2006 being $997. New Jersey's median property tax is $5,773, or $1,637 more than No. 2, New Hampshire.

"You wonder why people in New Jersey don't move to Indiana," he said.

DeBoer further compared Morgan County's median property tax to the rest of the country and the 25 largest counties in Indiana. Morgan County would rank 40th in the country and has the 17th highest property tax of the 25 largest counties in the state.

The next property tax "crisis" could come in 2009, when the tax relief from this year and 2008 will end.