When it comes to tax revenue, Anderson is a poor city — and the state's property tax caps implemented in 2009 are largely to blame.
When Indiana capped taxes on property at 1 percent, 2 percent and 3 percent of assessed value for homes, property and businesses, respectively, the state also gave counties the option of imposing or increasing local option income taxes.
Madison and many other counties across the state have done so. But, in the case of local municipalities, it's often generated far too little revenue to make up for losses caused by property tax caps.
According to a recently released study by the Indiana Fiscal Policy Institute, in 2014, Anderson generated $10 million less in tax revenue than it would have had if property tax caps weren't set in 2009.
That's $10 million less for police and fire protection and other important government services. And that would hurt any city, particularly one as small as Anderson (population about 56,000).
While the property tax caps have forced streamlining of local government and caused public officials to be better stewards of taxpayer money, there's no doubt that Anderson is less safe, less modern and generally a less appealing community because of property tax caps.
According to the IFPI study, titled Municipal Fiscal Health, Anderson's local option income tax draw has increased by less than $2 million since 2008. That ranks the city 12th out of 18 municipalities studied.
South Bend has taken the most advantage of local option income taxes, increasing its draw by more than $13 million.
Madison County has implemented a 1 percent county option income tax and a 0.25 percent public safety county option income tax. Both are the maximums allowable by state statute. The county option income tax will raise about $8.8 million in 2016 to be divided among government units in the county.
Anderson officials and those in other local communities have made do with less tax money. But in the end property tax caps have set back efforts in Anderson and other Hoosier cities to grow and provide infrastructure and services for local residents.