By Tim Vandenack, Truth Staff
tvandenack@etruth.com
The impact of tightening property tax caps is going to be tougher on local government than earlier predicted, according to new estimates.
It's got Elkhart County Auditor Dave Hess predicting that budgeting for 2011 is going to be "a whole lot tougher" for cities, schools and other governmental units than it was for 2010.
Tightening limits on property taxes -- outlined in property tax reform legislation last year -- is good news for homeowners, business owners and others who have to pay them. The caps potentially mean lower tax bills and less money they have to fork out to government, the goal of the 2008 legislation.
On the flip side, the county and the cities, towns, schools, townships and libraries here will see less revenue to cover their operations, and new estimates this month indicate their losses will be greater than earlier thought.
The figures -- which don't include a special state allocation meant to help some school districts offset 2010 losses -- come from Indiana's Legislative Services Agency and Elkhart County's finanancial advisor, H.J. Umbaugh & Associates of Plymouth. Here are some highlights:
* In 2010: Elkhart County's varied governmental entities will collectively see a dip of $11.51 million in property tax revenue, according to LSA. Umbaugh puts the figure at $13.62 million.
An earlier LSA estimate from October put the loss for the year at $8.81 million.
* In 2011: The county's varied governmental entities will see a dip of $12.5 million, according to LSA, while Umbaugh puts the number at $15.13 million.
LSA's October estimate totaled $9.93 million.
Breaking down the numbers, the city of Elkhart is the biggest loser here, followed by the county, the larger school districts and the city of Goshen. Here are some particulars:
* Elkhart: Stands to lose $3.34 million in property tax revenue in 2010, according to LSA, and $3.94 million, according to Umbaugh. For 2011, the loss estimates rise to $3.55 million and $4.38 million, according to the respective groups.
* Elkhart Community Schools: Stands to lose $1.89 million in 2010, according to LSA, and $2.01 million, according to Umbaugh, though an estimated $719,000 in state aid ought to temper that. For 2011, the loss estimates rise to $2.04 million and $2.22 million.
* Elkhart County government: Stands to lose $1.35 million in 2010, according to LSA, and $1.66 million, according to Umbaugh. For 2011, the loss estimates rise to $1.49 million and $1.87 million.
* Goshen Community Schools: Stands to lose $1.06 million in 2010, according to LSA, and $1.18 million, according to Umbaugh, though some $437,000 in aid ought to temper that. For 2011, the loss estimates rise to $1.18 million and $1.27 million.
* Goshen: Stands to lose $1.03 million in 2010, according to LSA, and $1.18 million, according to Umbaugh. For 2011, the loss estimates rise to $1.17 million and $1.33 million.
* Concord Community Schools: Stands to lose $904,143 in 2010, according to LSA, and $1.8 million, according to Umbaugh, though some $351,000 in aid ought to temper that. For 2011, the losses total $903,039 and $1.91 million.
The estimated revenue losses stem from tightening caps, or circuit breakers, on the property taxes property owners must pay.
For homeowners, the limits in 2010 fall from 1.5 percent to 1 percent of their home's assessed valuation. The caps for owners of rental property fall from 2.5 percent to 2 percent while the limits for industrial and commercial property owners go from 3.5 percent to 3 percent.