INDIANAPOLIS | Gary and other region communities looking for relief from new state property caps might need a little help from their neighbors.
MORE: Rules for local government appeals of state property tax caps.
That word came Friday at the first meeting of the Distressed Unit Appeals Board, a state panel created to hear budget pleas from local governments in line to lose at least 5 percent of property tax collections to the new caps.
"We may get some (appeals) pretty soon," said board Chairman Ryan Kitchell, director of the state Office of Management and Budget. "I know the city of Gary already has been working on their financial plan."
Gary, which levies some of the highest property tax rates in Indiana, is expected to forfeit more than $36 million next year to the tax caps legislators created last spring. Gary/Chicago International Airport officials this month announced plans to appeal a projected 2009 loss of $780,000, while East Chicago and Whiting officials have said they will consider appeals.
The new tax caps, which are being phased in, will limit tax bills to 1 percent of assessed value for homeowners, 2 percent for landlords and 3 percent for businesses by 2010. Government debt is excluded from the caps in tax-heavy Lake County, however, so property owners there will pay slightly more until that exemption sunsets in 2020.
A local government entity willing to work out a detailed financial plan similar to a bankruptcy recovery strategy can ask the Distressed Unit Appeals Board to adjust one or more of the tax caps upward for a year at a time. But the state panel adopted rules Friday stipulating that the distressed unit must get all overlapping taxing districts to approve the uptick.
Kitchell said in Gary's case, it appears the city would need resolutions of support from seven taxing bodies, including its airport, sewer and sanitary districts, Calumet Township and the Lake County Council.
Lake County councilmen Larry Blanchard and Tom O'Donnell said they were relieved to learn the state will require input from overlapping taxing units whose budgets could be affected if the caps were altered.
"It's always been a concern at our level that there's only so big a pool of cash," O'Donnell said. "And if other people are allowed to eat more heartily at that pool, it's going to cut into the other taxing units."
