TERRE HAUTE —
Vigo County’s assessed value for real property has dropped more than $300 million, or 7.5 percent, with the largest drop hitting the city of Terre Haute.
The city — which includes Harrison Township, Terre Haute Honey Creek Township, Terre Haute Lost Creek Township, Terre Haute Otter Creek Township and Terre Haute Riley Township — accounted for more than 80 percent of the decrease.
Terre Haute Lost Creek and Terre Haute Otter Creek had assessed values increase 3.7 percent and 6.5 percent respectively, but Terre Haute Honey Creek dropped 32.7 percent, or more than $84.8 million in assessed value. Harrison Township fell more than $170 million in assessed value, an 11.68-percent drop. Terre Haute Riley dropped 17 percent, or $986,055 in assessed value.
Such a drop in assessed value could result in the city having between $2 million and $3 million less in revenue next year, said Vigo County Auditor Tim Seprodi.
New state property trending values resulted in much of the lower assessed values. With a lower 2012 assessed value for properties, tax rates will likely increase for tax bills calculated for 2013, the auditor said.
However, whether that translates into higher tax payments for homeowners, apartment owners or businesses will not be known until spring next year when the Indiana Department of Local Government Finance finalizes tax rates and tax bills are prepared, Seprodi said. The county was among the last in the state to get its assessed values certified.
“Taxpayers will see an increase in tax rates, and some may see an increase in taxes even though their assessed values dropped,” Seprodi said.
The increases may likely push more taxpayers closer to or at state property tax cap limits, the auditor said.
Property taxes for homeowners are capped at 1 percent of their assessed value, while apartments are capped at 2 percent and commercial/business property are capped at 3 percent under state law. As an example, a home valued at $100,000 would be capped at $1,000 for property taxes.
Seprodi said officials with the Indiana Department of Local Government Finance recommended that municipalities and other taxing units in Vigo County configure their 2013 budgets on about 20 percent less revenue in anticipation of lower assessments.
“We did do a reduction” in anticipated revenue for 2013, Terre Haute City Controller Leslie Ellis said Wednesday. “However, once I receive the final certified assessed values, I can run it through our model and see where we are. If our tax rates increase, which it sounds like they will, our circuit breaker credit will be larger, so that means we will lose more revenue.
“What that dollar amount is right now, we don’t know. When we do know, we will work on the 2013 budget to adjust it accordingly,” Ellis said.
John Hildebrand, executive director of the Taxpayers Association of Vigo County, said the city will have to consider options, such as a pilot program whereby the Terre Haute Sanitary District will pay $2.1 million to the city in lieu of taxes to support services such as police and fire protection.
The Terre Haute City Council this month is also considering another action, transferring $2.1 million into the city’s general fund from the city’s portion of a countywide Economic Development Income Tax. The council is also considering a transfer of $3.5 million from its Rainy Day fund into the city’s general fund.
Hildebrand said the city should also consider other options, such as implementing a trash fee that would generate as much as $2.6 million for the city. “I think that this makes it more imperative that the trash expense be taken out of the city’s general fund, as the city is getting less money,” he said.
Hildebrand said property tax caps, while likely not intended, “has money shrinking faster than municipalities can respond to.”
Howard Greninger can be contacted at 812-231-4204 or firstname.lastname@example.org.