In Elkhart County, property tax cap's impact on government budgets grows

That's good news for homeowners and other property owners. Their property tax bills will be lower, the intent of the new limits, approved by state lawmakers in 2008 and enshrined in the Indiana constitution after voters approved a referendum question on the matter last November.

Cities, towns, the county, townships, libraries and school districts here, though, that's another story. Their corresponding property tax losses in 2011 are going to be bigger than earlier expected because of the limits, which might cause some scrambling to compenstate for the lost funding.

All told, caps are expected to trim property tax revenue entering local government coffers across Elkhart County in 2011 by $21.5 million, according to an October report by Indiana's Legislative Services Agency. That's up from the actual figure of $13.01 million in 2010 and the LSA's earlier estimate for 2011 of $12.5 million.

The caps for homeowners now total 1 percent of a home's assessed valuation. They amount to 2 percent on residential rental property and farmland and 3 percent on commercial and industrial real estate.