When City Council increased the county-wide income tax by 0.35 percent last June, it earmarked part of the revenue for public safety and the rest – 0.25 percent, or roughly $20 million – to property tax relief.
That amounts to a credit of about 5 percent and is reflected in the 186,000 bills mailed by Allen County Treasurer Sue Orth’s office this week. But many Fort Wayne residents will not notice the resulting decrease in taxes enjoyed by people living in other parts of the county.
There are three main reasons for that, according to county Auditor Tera Klutz and her chief deputy, Nick Jordan. For one thing, the city this year also increased its levy, or the amount of property taxes it collects, by about 10 percent. In addition, taxes on about 40 percent of Fort Wayne homes have already reached the statewide maximum of 1 percent of their assessed value compared to 32 percent countywide. What’s more, this year’s bills reflect the impact of voters’ 2012 approval of a $119 million building-improvement plan for Fort Wayne Community Schools.
And so, while on average taxes on a $100,000 home will decrease by between 2 percent and 6 percent in most districts, taxes in most areas of Fort Wayne will remain flat. But they would have increased if not for council’s action.
The impact will vary according to individual circumstances, however. Klutz and Jordan noted that while taxes on a $100,000 home in Fort Wayne at the 1 percent cap will remain flat, taxes on a similar home in Aboite Township that has not reached the cap may decrease by 4 percent. More city properties are at the cap, they said, because city taxes are higher.
And while those so-called “circuit breakers” may be good news for taxpayers, their impact on government is significant. County wide, governments will collect about $41 million more this year if not for the caps. Among the hardest hit are Fort Wayne ($16.6 million) and Allen County government $6.8 million).
The caps do not permanently protect property owners from tax increases, however. If a home’s assessed value increases, the tax on that property can also increase until it again reaches 1 percent of the assessed value. The cap is 2 percent on apartments and farms and 3 percent on commercial and personal property.
And that’s just what has happened to farms, they said. While the overall value of real property in the county increased by just 1 percent this year, the value of farmland increased by nearly 8 percent to $1,760 per acre. That means farmers may see tax increases of between 4 percent and 8 percent.