Routine visits to the Indiana Distressed Unit Appeals Board serve as a telltale sign of how the state's property tax caps are impacting Gary.
But a state report released this month sheds new light on the caps' fiscal impact: At least four of Gary's taxing units, including the Gary Community School Corp., saw drastic cuts in the amount of taxes they can collect.
The property tax caps, voted into the state's constitution in November, stripped more than $13.9 million from Gary public schools, $3.5 million from the Gary Public Library and $874,655 from Gary/Chicago International Airport, according to a report produced by the Indiana Legislative Services Agency for Lake County. Those numbers represent more than half of the taxing units' levies. The city of Gary didn't see $12.5 million because of the caps in 2010.
"Generally speaking, if the tax rate is higher than $3 per $100 of assessed value, the unit of government is impacted by the property tax caps," Department of Local Government Finance spokeswoman Mary Jane Michalak said. "That is the case in Gary's situation. The fact that they have such a high tax rate, they will have a greater impact in the property tax caps than units of government in the $2 or $1 range."
For Gary libraries, the loss of revenue may mean shuttering two of the system's branches.
Calumet Township, whose Trustee Mary Elgin has decided against seeking relief from the DUAB, saw a $6 million cut in 2010. The township closed an office on Ridge Road and moved all operations to its office in downtown Gary.
"The trustee has consistently stated that she looked at it carefully and she has analyzed the predicament that the city of Gary has been put into going to DUAB. That might be a very good thing for the city, there is no criticism on that, but one of the things that happens when you go to DUAB, taxes are raised that's how the city manages to get the extra money," Elgin's executive aide, Stafford Garbutt, said. "The trustee did not want to burden the hard-working township residents with increased taxation."
When Elgin came into the office of trustee, the township had more than 200 employees. Now those numbers have dwindled to around 90, according to Garbutt. Calumet Township's shortfall also forced the township to reconfigure how it gives rental, utility and medical assistance.
The cap's influence also extends beyond Gary taxing units. Lake County experienced a $11.2 million hit.
The city of East Chicago didn't see $12.8 million because of the tax caps, according to the report.
However, for some taxing units that saw the sharpest impacts, losing the revenue didn't result in the loss of services because of planning.
Gary/Chicago International Airport Interim Director Steve Landry said the airport started planning several years ago for the property tax shortfall. The airport went to DUAB with the city of Gary to seek relief in 2009 but didn't return for this year, and doesn't know if it will plan a trip in 2011.
"We started preparing for the worst case scenario way back then," Landry said. "We've prepared our budgets over the last several years with that in mind."