From the Bloomington Herald-Times:
...The property tax bill you pay is based on not only the assessed value of your property, but the assessed value of all properties in your county and your tax district, as well as the budgets of the local governments, schools, libraries and other public agencies.
It attempts to proportionally distribute the costs of running those public services among property owners.
Assessed value
The value of all real property — real estate — in Indiana is estimated each year by staff in each county’s assessor’s office. The assessed value of a property is a factor in calculation of its tax bill, but it is also part of the calculation of its tax rate and tax rates elsewhere in its county, township, city or town.The net assessed value for a governmental unit is the sum of all assessed values within it, minus exemptions, such as the value of schools, churches and government buildings, and credits and deductions, such as the homestead credit given to homeowners.
For example, the net assessed value of Monroe County in 2011 was around $9.5 billion. That’s the total value of all nonexempt properties in the county.
The net assessed value of townships, cities and towns is part of the calculation of tax rates within those areas. It is the denominator in calculating tax rates, so if the assessed value of your property rises, it pushes up the net assessed value of the entire jurisdiction, which contributes to a lower tax rate for the area. As the assessed value of a county or township rises, tax rates fall.
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Tax districts
Tax districts are areas where tax rates throughout are uniform.Unincorporated areas of each township form a tax district, and taxes on properties in such areas fund operation of the township, its emergency assistance to the poor, and its parks and cemeteries, if it has them, and contribute to paying off the township’s debt. Township taxes also pay for the township’s fire department.
An incorporated area within a township is a separate tax district. Property taxes in such areas pay for the same services at the same rates as in unincorporated areas of the township, but don’t fund the township’s fire department.
Additionally, property taxes in incorporated areas pay for the city or town’s fire department, parks, debt, general fund, etc. So within a township, property taxes in incorporated areas will always have a higher total tax rate than in unincorporated areas.
All properties in a county, regardless of tax district, are charged a uniform rate that funds the county government, such as the county general fund, the health fund, the capital development fund, the county airport fund and the county bridge fund.
Other uniform tax rates charged to all properties also fund the county library and the solid waste management district.
For example, in Monroe County this year, all property owners paid 33.61 cents per $100 of assessed value to fund county government operations and 10.97 cents per $100 of assessed value for the public library.
Those who own property in Bloomington also paid 78 cents per $100 of assessed value to fund city operations, and those who live in Ellettsville paid 89.16 cents to fund that town’s operations. Stinesville residents pay 19.74 cents per $100 assessed value more than other Bean Blossom Township residents to live in town.
The total tax rate within a tax district, then, is the sum of tax rates that fund numerous coffers within various levels of government, agencies and schools.
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Setting tax rates
In Indiana, local government financial boards, such as city and county councils and township boards, are required to prepare a budget to fund operations the following year. Money to fund those operations can come from property taxes, local option income taxes, fees, grants, money left over from previous years and various other smaller sources.The biggest source of revenue for local governments is property tax.
A levy is the portion of revenue that comes from property taxes, and it is the numerator in the tax rate calculation.
To set tax rates, government units look at the previous year’s levy and add “levy growth factor” that is essentially a cost of living adjustment that the state sets based on statewide income growth. For 2012 tax payments, the levy growth factor was 2.9.
The levy for each taxing unit is divided by the net assessed value of all properties served by that unit to set the tax rate.
Your tax bill
Your property tax bill is based on the assessed value of your property minus any deductions, such as the homestead credit, and credit for having a mortgage.That value is multiplied times the tax rate for your tax district to produce your property tax bill.
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http://www.heraldtimesonline.com/stories/2012/05/06/news.how-your-property-tax-bill-is-calculated.sto
