Property taxes continue to be the number one topic of debate throughout the state, and with all of the information floating around out there it can be quite confusing. Here is some information that I hope will better explain our current situation.
Over the years, government spending has grown to an unacceptable level, creating unbearable property tax rates for Hoosiers. I am sure that many of you are wondering where all of this money goes, so I have included a chart to give you a better perspective.
Your property tax rate is determined by the amount of money government units in your county can spend, based on projected tax revenues. This is determined by dividing the estimate of county funds to be raised by the net assessed value of your home, which equals the county tax rate.
Estimate of county funds to be raised ÷ net assessed value = County Tax Rate Once the county officials determine the county tax rate from the equation, it is then submitted to the Indiana Department of Local Government Finance for approval.
Recently, this rate has jumped extremely high, because the inventory tax has been eliminated to encourage businesses to locate in Indiana. While it is good for economic growth, this along with undervalued commercial assessments has caused the burden of property taxes to be shifted more to residential property owners. This is especially true for lake front residential properties, which are often times second homes that are not eligible for state-funded assistance such as the homestead credits.
Unfortunately, a real solution to this problem has not been developed and lawmakers continue to use band-aid approaches such as rebate checks. During session, the General Assembly did pass legislation to allow local governments more flexibility in structuring their tax base, by allowing them to raise local option income taxes. While this is a start, in order to truly reduce these rates, all units of state and local government must work together to reduce spending, which is the ultimate issue.
Please feel free to contact me with any further questions you might have about property taxes or any other topics. I may be reached by phone at 1-800-382-9841, e-mail me at firstname.lastname@example.org, or write me at 200 W. Washington St., Indianapolis, IN 46204.
Visit us online at www.in.gov/legislative