Vincennes Clerk-Treasurer Calls for Property Tax Increase

From the Vincennes Sun Commercial:

Is there a tax hike in store for city property owners?

Clerk-treasurer David Culp suggests there should be, one that would generate additional money for a specific purpose, such as street repairs.

Culp told members of the council’s Budget and Finance Committee on Tuesday that the tax, itself, actually already exists, it’s just that the rate is low and needs to be raised, from 1 cent to 5 cents.

Culp presented the idea to the council some weeks ago. During former mayor Bill Rose’s administration, when Culp was a member, the council created a Cumulative Capital Development Fund, one that had its own property tax rate and generated money to be used, typically, on one-time capital improvement expenditures like the purchase of police cars.

It was initially created at 5 cents per $100 of assessed valuation; an owner with property that had an assessed valuation of $50,000 would pay $25.

Without council action, the rate slowly decreases; currently it’s 1 cent per $100, and that same property owner now pays $5.

This year, the tax rate generated little more than $50,000, according to Mayor Joe Yochum.

Culp encouraged the council to consider raising it back up to a nickel in an effort to generate additional revenue, potentially as much as $150,000 a year.

However, it’s unlikely that much would actually be raised as the property tax caps passed by the General Assembly in 2008 would probably kick in.

Under the new tax legislation, the owner of residential property cannot pay more in property taxes than 1 percent of the value of her home.
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Yochum recommended using the additional money on street repairs. This year, the tax rates used to raise money for street repairs only generated about $200,000.

But again, he reiterated the property tax caps now in place will likely prohibit the rate from raising its potential $150,000 per year.

Culp said should the council raise the rate, it will, once again, lessen as the year’s pass.
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The council will likely discuss the proposal at its next meeting, scheduled for 6 p.m. July 23 at City Hall, 201 Vigo St.

Should the council decide to raise the rate, it must be done by the first of August, Culp said.
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http://suncommercial.com/articles/2012/07/11/news/local_news/doc4ffe303d186dd573270065.txt