From the Goshen News:
While there may be a bit of a love/hate relationship brewing between the issues of tax caps and annexation as they relate to the city of Goshen, those outside of the city have their own perspective.
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Funded pretty much entirely by local property taxes, Cheek admitted that the Elkhart Township Trustee’s office has taken some pretty big hits to its budget over the past couple of years due to things like tax caps and annexations.
The township trustee’s office handles three main tasks — township poor relief, township cemetery maintenance and managing a township fire department for those located outside of the municipal area of Goshen.
“The number one thing that people hear about is the township assistance program, which is the poor relief program,” Cheek said. “That’s where we help people with rent, with their utilities. We can help with food and we help some with prescriptions. Then we also maintain three fire stations and we have about five or six cemeteries that we take care of.”
All of these programs cost money — money that Cheek said has been steadily shrinking as tax caps and annexations cut into the supply of property tax income flowing into his office from the township.
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According to Yoder, one of the biggest issues he sees connected to the whole tax cap/annexation issue is the fact that residential areas today actually create almost $1.60 in service costs for every dollar they pay in property taxes, leading to an almost guaranteed loss of revenue for cities if these properties are annexed and begin receiving city services.
“Residential has become a real problem for both cities and counties because they don’t pay their way,” Yoder said. “The county is going to be looking at some significant reductions again next year, probably in the $1 million to $2 million range. And we’ll do it, but we’re at the point now where services are going to be cut. But with the city, there’s simply no incentive for the city to annex residential, and that’s a shame, because cities are made for residential. Right now they just can’t afford to provide the services.”
Per Yoder’s calculations, it would take a home assessed at about $350,000 just to generate enough property taxes to pay for the cost of individual services used.
“That’s when the property taxes begin to pay for the services that home receives,” Yoder said. “But if you look at the average value of a home in Elkhart County, I think we’re closer to $100,000. So we’re a long ways from the break-even point when you take in all the services that are provided such as sewer, water, all the county services, the jail, county and city police, etc. There are a lot of services that are paid out of property taxes.”
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http://goshennews.com/breakingnews/x437163863/Township-trustee-says-governments-should-live-within-their-revenue-means
