From the Anderson Herald-Bulletin:
Since 2005 the city of Anderson’s annual property tax revenue has continuously decreased to a total loss of almost $9.2 million in 2011, and Mayor Kevin Smith hopes to reverse that trend by bringing more companies and jobs to the city.
He also plans on adjusting city expenses to better reflect its income, which could affect city staffing levels and services.
According to numbers provided by the city, in 2005 the city received close to $25.66 million in property tax payments. In 2011, the collection totaled about $16.46.
And it appears the 2012 payments will also be lower than expected, said City Controller Sam Pellegrino.
Smith said the decline can be attributed to several factors.
The first one to come to Smith’s mind is the property tax cap legislation passed by the Indiana General Assembly, which caused Anderson to lose $5 million in revenue starting in 2005.
Property tax rates in Indiana are capped at a maximum of 1 percent of value for residential properties, 2 percent of the value for rental and farmland, and 3 percent for businesses and all other types.
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“The other $4 million we lost is a direct reflection of several things: falling property values, loss of industries (businesses) and houses that have become vacant or have non-payments on the taxes,” he said.
As businesses shut down or moved out, those property tax dollars they were paying left with them.
Additionally, as people lost their jobs, they moved out of the area, sometimes abandoning their homes and disappearing. Many others still living here are delinquent in paying their taxes on time, often because they can’t afford to keep up with the payments because of tough economic times.
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As the city works to grow its tax base, what has helped make up for some of the property tax revenue loss is other taxes that the city collected over the last several years.
The city began collecting an annual casino tax of about $3 million once Hoosier Park opened its casino portion in 2008. There was also an increase in county option income taxes and the wheel tax was in place. The wheel tax, which is used to repair roads, won’t be around after this year since the Madison County Council voted to rescind it.
“During the last four years we had new forms of revenue initiated, but they still did not keep up with the amount of dollars that were lost,” Smith said.
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The city is currently working on the 2013 budget, which each department, along with Pellegrino and Smith, is finding ways to cut back and reduce spending. Earlier this year, Pellegrino had asked each department to try to reduce its budget by 20 percent in preparation of the necessary reductions of the 2013 budget, he said. Several have presented their plans to him and have started making changes.
The proposed budget has not been finalized. But when it is, it will go before the council this fall for approval, before it goes before the state, said city attorney Jason Childers. The council is allowed to reduce the submitted budget, but cannot increase it, he said.
http://heraldbulletin.com/business/x328564120/Anderson-s-property-tax-revenue-continues-steady-decline
