From the Fort Wayne Journal Gazette:
State property tax caps will save Allen County property owners about the same amount of money this year as they did in 2011, but some individual governments will see large swings in the revenue lost to the caps.
These swings, which will cost Fort Wayne nearly $500,000 more in revenue this year, are partly due to a change in the state’s interpretation of how local property tax credits are distributed.
Taxpayers across the county will save $35.3 million this year thanks to the caps, meaning money that would have been historically collected by local governments is written off. This is less than a 1 percent increase from 2011.
State law caps the amount of property taxes a person can pay based on the property’s value. That cap is 1 percent for homeowners, 2 percent for rental homes and farmland and 3 percent for businesses.
Fort Wayne city government will lose nearly $14 million to the caps this year, up $467,656 from 2011 and up $900,000 from the city’s budget projections.
Controller Pat Roller said the caps are something all governments must deal with. She said the city must balance its revenue and expenses, and that is one of the reasons the mayor convened a panel of experts to help create a long-term fiscal policy.
“In the next five months, the city will be working with the City Council to discuss a variety of options through the fiscal policy group,” she said.
But with Allen County taxpayers’ overall savings unchanged from 2011, the city’s loss means someone else is gaining. The largest winner in 2012 is Northwest Allen County Schools, which will see its revenue losses from the tax caps fall by $556,998 this year.
There are several reasons for the drop for the district, which is collecting nearly the same amount of property taxes in 2012 as it did last year – $21.5 million.
Bill Mallers, district business manager, said there was a 5.2 percent increase in total property value in the district this year. In addition, other governments in the area, such as Perry Township and Huntertown, slightly reduced their property tax revenue, leaving more for the district to collect.
Allen County Auditor Tera Klutz said one of the main reasons for the school district’s gain was a change in how the state distributes local property tax relief.
A portion of the income taxes that county workers pay helps provide property tax relief. The money was historically distributed to governments based on a formula that excluded debt payments, essentially meaning areas with low property tax debt got more property tax relief.
Klutz said the state this year determined those local credits should be distributed uniformly across the county – a determination she believes is accurate and based on recent state law.
The change means areas with higher levels of debt, such as Northwest Allen, received a larger portion of the relief than they had previously. The district will receive nearly $450,000 more from the credit this year than it did last year, according to the calculations from the auditor’s office.
Klutz said because the majority of the homes in the school district had reached the 1 percent cap, the change in the local relief calculation won’t really affect homeowners’ bills. Instead, it will simply mean more money is going to their respective governments and schools and less is lost to the tax caps.
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http://www.journalgazette.net/article/20120328/LOCAL/303289985
