BY TIM VANDENACK, Truth Staff
tvandenack@etruth.com
GOSHEN -- The loss to the cities, schools and other Elkhart County taxing units brought on by new property tax caps will total $3.24 million for 2009, a bit lower than state officials had predicted.
On the flip side, the chief beneficiaries of the caps -- those who will keep that money in their pockets -- will be owners of apartments and other residential rental properties. Homeowners, the key focus of state legislative reform efforts that led to the caps, will pocket only a small sliver of the total.
News of the $3.24 million figure -- contrasting the state's $3.29 million estimate and the $4.6 million loss estimated by the county's accountant last February -- was met with a measure of relief Monday. Officials from Elkhart County, Goshen, Elkhart and some school districts here have been wringing their hands over the past several months, worried how big the revenue dip would be.
"I think it's good news," said County Auditor Dave Hess. "It's less than what I think everybody had figured on."
Even so, Doug Hasler, who manages finances for Elkhart Community Schools, said there's still apprehension about the possible impact in 2010. That's when Indiana's Legislative Services Agency estimates the $3.24 million loss across Elkhart County's varied taxing units -- the county and the cities, towns, schools, libraries and townships -- will grow to $8.81 million.
State lawmakers approved the caps, known as circuit breakers, in 2007. They limit the tax burden of Indiana's property owners, but by doing so, they also reduce the stream of property tax revenue entering government coffers.
For 2009, the limits total 1.5 percent of a home's assessed value for homeowners, down from 2 percent, and fall to 1 percent in 2010. They total 2.5 percent for apartments and other residential rental property and 3.5 percent for business and commercial property, falling to 2 percent and 3 percent, respectively, next year.
Though state lawmakers most often cited the plight of homeowners concerned about runaway property taxes in implementing the caps, a breakdown of the $3.24 million locally shows they benefited only marginally.
Owners of non-homestead residential property such as apartment units and home rentals accounted for $3.09 million of the total, while homeowners accounted for only $121,312.
Hess noted that homeowners weren't the only ones howling about high property taxes in 2007 when lawmakers implemented the caps.
"The apartment owners were also screaming," he said.
At the same time, homeowners have benefited from other breaks that have kept many below the 1.5 percent cap. Those include the standard homestead deduction, $45,000 for most, and a new supplemental deduction of up to 35 percent of a home's remaining value after that.