Vanderburgh County must cut more than $1.5 million from its general operations budget this year, thanks in part to property tax revenue lost to statewide tax caps.
The shortfall was discovered only recently, leaving the County Council struggling to reduce this year’s expenditures without cutting staff.
“We’re going to examine all the various accounts that we have, see if we have surpluses outside the general fund,” said County Council President
Tom Shetler. “I think it’s possible to do without laying people off or firing them. But it’s not possible to continue as we are.”
...And Shetler fears this year’s budget shortfall is not a one-time event.
In 2010, the state permanently established property tax caps, which set a maximum tax rate for residential properties at 1 percent of assessed value, agricultural properties at 2 percent and commercial properties at 3 percent.
Each year, the state calculates tax rates based on an area’s assessed property values. The areas with low assessed values, the higher the tax rates to accommodate local government budgets. Property taxes fund city, county, township and school corporation budgets.
State law prohibits local governments from calculating revenue lost because of tax caps in its budget projections. The county council did try to set aside some money last year to cover lost revenue, Gries said. But not enough.
“The higher the tax rate, the more people hit tax caps,” said County Auditor Joe Gries. “That is just money that can’t be collected. It is something we’re going to have to deal with every year.”
This year, the property assessments across Vanderburgh County trended down, Gries said. Fewer people will hit their tax caps in years when assessments trend upward, he said.
The county’s general fund budget for 2013 is about $51 million, Gries said.
Across the county, the various taxing units lost a collective $10.5 million to tax caps in 2012. This year, they’re projected to lose $22.5 million, he said.
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http://www.courierpress.com/news/2013/apr/11/tax-caps-require-county-to8232cut-budget/
