By Dan Carden, Times of Northwest Indiana
dan.carden@nwi.com
INDIANAPOLIS | Schools and local governments never again will have to take out loans to pay bills while they wait for their property tax revenue to come in if a proposal by state Rep. Shelli VanDenburgh, D-Crown Point, becomes law.
Last year, 90 of 92 Indiana counties were late in billing, collecting or distributing property taxes, forcing entities dependent on that revenue to borrow from banks. Schools and local governments paid millions of dollars in interest on that borrowed money.
Those interest payments were tax money "basically flushed down the toilet because it wasn't used for the purposes intended," VanDenburgh said. "Those dollars were supposed to be used for services for the taxpayers."
"The only winners in the way we do it right now are the banks," VanDenburgh said. "The banks are loaning the money and reaping the rewards when the bills don't go out."
VanDenburgh's House Bill 1059 would change how property taxes are billed starting in 2011. Her legislation is slated for a committee vote today. If approved, it would move on for a vote in the full House.
In the fall, property owners would receive that year's bill and a spring payment due of 50 percent of their property taxes from the year before. Then, in the fall of the next year, property owners would receive a final bill with any adjustments to that year's taxes included and a spring payment due of 50 percent of the taxes from the year before.
The change would ensure property tax payments are due and come in on a regular schedule, rather than the somewhat random due dates Northwest Indiana property taxpayers have been subjected to in recent years. Schools and local governments no longer would have to borrow money to make it through the year because tax payments would be coming in regularly.
"We have to stop the cycle that we're in. It's hurting us all," VanDenburgh said.
Representatives of county treasurers and county auditors groups told the House Ways and Means Committee on Tuesday "good" counties shouldn't be forced to change the way they do things because other counties are slow at collecting and distributing property taxes.
But state Rep. Scott Pelath, D-Michigan City, said everyone in the state pays when tax dollars are wasted.
"My county is drowning in interest costs. How do we defend the status quo?" Pelath asked.