Tribune Reports Property Tax Impact of Mishawaka's Schools' Proposed Referendum Unclear

From the South Bend Tribune:

When it comes to the proposed $28 million School City of Mishawaka referendum, business leaders all agree. It's complicated.

They haven't yet been able to figure out just what the full impact would be on businesses in the school district, if the referendum passes. There are too many unanswered questions.
 

There is only one thing they are sure about: property taxes will be higher.
 

According to H.J. Umbaugh & Associates Certified Public Accountants, the firm that compiled the data for the school corporation, taxes would increase about $294.40 for every $100,000 of a commercial property's assessed value. That increase in taxes would last for the next 20 years, until the bond is paid off.
 

The Tribune contacted local businesses to find out what potential impacts they expect. Many business owners were unaware of the proposed referendum and most who were aware were unsure of how it would affect them.
 

"I'm pretty naive about this," explained Don Dames, chief financial officer at Nyloncraft Inc., an injection molding company that sits on the northern edge of the school district. He heard about the referendum last week.
 

"I'm just ball-parking from what little I know," he said. "But it would be about a 9 percent increase on our property tax bill."
 

That would come out to about $30,000 more per year, he said, adding: "It's not a small type of change and you have to find that cost somewhere else. Those costs are tough to pass on to the customer in this type of environment."
 

The issue is further complicated by the passing of Indiana's circuit breaker cap in 2008, which aimed at ensuring Hoosiers would not have to pay more than a fixed percent of their property's gross assessed value in property taxes. It set the cap for commercial property at 3 percent, beginning in 2010.
 

However, St. Joseph County was one of two counties in the state to receive a temporary exemption from the circuit breaker. The exemption was for debt issued before July 1, 2008. The county was given until the end of 2019 to bring its debt level down so that it could operate under the cap. At that point, the county's property taxes are supposed to be on par with the rest of the state. Currently, businesses in the county pay about 3.3 percent of the assessed value of their property in taxes.
 

But if the referendum passes, the part of Mishawaka that lies within the school district will still be paying higher taxes in 2019 than most of the rest of the state. This includes businesses in the two tax increment financing districts that overlap the school district, though the TIF districts would not receive any increased revenue, according to the Indiana Department of Local Government Finance.
 

That has some business leaders wondering about the long-term implications.
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See the full article here:

http://www.southbendtribune.com/news/local/keynews/localeconomy/article_c7453c20-28ed-11e3-ae82-0019bb30f31a.html