Kokomo — Although the impact on local taxes remains unclear, the announcement that Chrysler Group will invest $1.2 billion in Kokomo this year could mean a significant climb in the county’s assessed value.
Earlier this year, Chrysler announced it would invest $343 million and $843 million in their Kokomo facilities to add two new transmission lines.
According to Howard County Assessor Jamie Shepherd, the net assessed value for all of Howard County is $3.4 billion for 2010 taxes payable in 2011. Not taking into account tax abatements and other factors that will affect the assessed value, the Chrysler investment is 35 percent of that total.
She said the total net assessed real and personal property values for the four Chrysler plants in Kokomo is currently $950 million. That total drops to $651 million after tax abatements are factored into the equation.
“The $1.2 billion investment doubles their total assessed value,” Shepherd said. “This is a wonderful investment for the community and means job retention.”
Shepherd said the impact, as of Thursday, doesn’t take into account any changes in the current assessed values.
“Is this going to be retooling or new equipment?” she said.
The Kokomo Common Council has already approved a tax abatement on the $343 million investment by Chrysler and is expected to consider a tax abatement on the $843 million investment at its Dec. 13 meeting.
Shepherd said tax abatements on personal property can be for a maximum of 10 years. The abatement starts at 100 percent the first year and declines by 10 percent each year.
She said the impact on the assessed value depends on the terms of the abatement and the window provided for implementation.
The decision of which of the four Kokomo Chrysler plant to receive the improvements will also have an impact on either the Kokomo-Center or Northwestern school corporations, according to Shepherd.
“If it’s a retooling of existing equipment, there could be a higher gross assessed value, but a lower net assessed value for tax purposes,” Shepherd said. “All taxes are determined by the next assessed value.
“Lower assessed values for Chrysler means a higher tax burden for other property owners,” she said.
Sheila Pullen, Center Township assessor, said during a tour of Chrysler facilities earlier this year county officials were told several transmission lines were going to be retooled.
Pullen said any tax abatement doesn’t begin until the equipment is put into use.
Shepherd and Pullen plan to have discussions with Kokomo officials before the latest tax abatement request is considered.
“The impact will depend on when the new production lines start working,” Pullen said. “Chrysler wants to have them operating next year.”