From the Terre Haute Tribune Star:
Back in December, the first shoe fell when local officials said assessed property values in Vigo County had dropped by more than $300 million, about 7.5 percent. Since then, officials, including Mayor Duke Bennett, have been wondering what this would mean for their budgets.
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Because assessed values in Vigo County fell, tax rates needed to increase so that each taxing unit could reach its approved levy. In Harrison Township, for example, the property tax levy increased to $4.01 per $100 of assessed value from $3.73 cents last year.
Because of the higher rates, more properties in Vigo County have hit their caps, making it harder for the city and other taxing entities to raise all the money they hoped to spend.
According to budget figures released last week, the property tax caps will reduce property tax revenue for the City of Terre Haute by about $9 million this year.
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Indiana’s Department of Local Government Finance approved a general fund budget of $33.2 million for the city. That means the city has spent about $7.9 million of its approved general fund budget so far this year.
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Apart from property taxes, the city receives revenue from a number of other sources. Those sources include the county’s wheel tax, the county’s economic development income tax, the regular county income tax and taxes on alcoholic beverages. In the first quarter, these other sources of revenue reached about $2.9 million, according to figures provided by the city.
On a semi-annual basis, the city also receives money from cigarette taxes, financial institution taxes, motor vehicle/aircraft excise taxes, commercial vehicle excise taxes and a liquor excise tax.
Property taxes are the biggest single source of revenue for the city, but the city receives its annual property tax revenue in just two big payments, one in July and one in December. As a result, managing the city’s budget is largely a timing and balancing act, attempting to make sure all sources of revenue are adequate to cover expenses at the time those expenses arise.
To help it meet day-to-day expenses between property tax payments, the City of Terre Haute has borrowed money in recent years. In 2012 the city borrowed $5 million using what city officials called a “tax anticipation warrant,” essentially a short-term loan to be repaid using future tax revenue. That loan was renewed again for this year.
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See the full article here:
http://tribstar.com/local/x1915231632/Tax-caps-to-cost-city-9M-this-year
