By Bob Kasarda, Times of Northwest Indiana
bob.kasarda@nwi.com
VALPARAISO | While local officials had reason to breathe a sigh of relief when property tax bills went out much earlier this year, they may yet find themselves again scrambling to pay bills.
Preliminary figures gathered seem to indicate tax collections are down this year, perhaps more than 20 percent in some areas including the city of Portage, Jackson Township and the town of Pines.
Sharon Lippens, director of Porter County's Information Technologies and Service Department, who intends to recalculate the figures today to remove some unrelated information, said she expects there still will be unusually large shortfalls.
A shortfall of nearly 12 percent in the preliminary figures for Valparaiso concerned Clerk-Treasurer Sharon Swihart.
"That's huge," she said. "What are people going to do?"
If the roughly $2 million shortfall holds, Swihart said cuts likely will have to be made.
"I don't know what we'll do if this is the case," she said.
The city already is sitting on nearly $9 million in debt, which needs to be paid once this year's revenue arrives, Swihart said.
County Council President Bob Poparad, who asked that the statistics be compiled, said he believes the shortfall reflects the troubled economy.
"This is a good example of the sign of the times," he said. "This is why we need to put property tax caps in place. People can't afford to live in their homes anymore."
A proposal to rewrite the state constitution to cap the property tax rate of residences at 1 percent of assessed value, rental property at 2 percent and business and industrial property at 3 percent could be approved by state lawmakers during the upcoming session and put before voters next fall.
Portage Clerk-Treasurer Donna Pappas said she was surprised to learn that Portage's collection rate was at just 76.94 percent, as compared to about 95 percent a year earlier.
Pappas had not yet had time to determine what impact the apparent shortfall would have on the city's budget.
Among the potential effects on municipalities and other taxing units is that they will have to borrow money to make up for the shortfall and raise taxes to cover the cost if they are not already collecting the full amount of revenue allowed, said Mary Jane Michalak, chief of staff and director of communications at the Indiana Department of Local Government Finance.
In response to local concerns, Michalak said delinquent tax payments will not penalize taxing units by cutting into the future amounts of revenue they are allowed to generate. Any delinquent payments are credited to the year they originally were due, she said.