Tax rates across the county mostly fell this year after the values of properties went up.
But you’ll have to wait until you get your tax bill this spring to find out whether you’ll actually pay less this year.
Tax rates dropped for most of the county, except in a few areas of White River, Pleasant and Clark townships due to increases in tax rates for Clark-Pleasant Community School Corp. and the Bargersville Fire Protection District. In most other places, tax rates were down 2 to 5 percent, with some areas around Whiteland seeing decreases of 10 to 15 percent.
But just because your tax rate went down doesn’t mean your tax bill will go down, too. For example, in and around Franklin, tax rates dropped by about
7 percent because values were up and the city is spending less than it did last year. But if homeowners already have met their property tax cap, they will still pay 1 percent of their property value. And if their home value went up, they would end up paying more because the cap would be higher.
Property values increased due to multiple factors. Farmland values increased based on a state formula, more homes were built on previously vacant lots, and more homes were selling at higher prices which led to increasing values in some neighborhoods, Johnson County Assessor Mark Alexander said.
The county also eliminated about 4,000 homestead credits, which lower the value of a property that the owner is taxed on. The county got rid of the credits for houses where no one is living, that are being used as rentals or had owners who didn’t verify their information, Johnson County Auditor Jan Richhart said.
Those credits typically reduce a home’s taxable value by $45,000, and then another 35 percent is cut from the remaining amount. For example, a person with a $100,000 house has the taxes calculated on just $35,750 after homestead deductions.
Tax rates also are impacted by government spending. Some local governments are spending more on new staff and new equipment, while others made spending cuts and paid off debt.
All property owners are paying more for the county government tax rate, which increased 7 percent because of a state requirement to combine all emergency dispatch centers into one. Dispatchers from Franklin, New Whiteland and Edinburgh are now county employees, so their salaries are paid by the county. That meant the county had to increase its tax rate, while those cities and towns decreased their spending. Greenwood’s dispatchers will join the county payroll next year once the new dispatch center is built near the jail, so the county tax rate may increase again next year.
Despite the countywide increase, tax rates still generally went down because property values increased more than government spending.
In Franklin, the tax rate went down because the city didn’t have to pay 10 dispatchers and cut spending on fuel and health insurance by $250,000 total and property values went up about 5.5 percent. Last year, Franklin’s rate went up because property values dropped by almost 10 percent, Clerk-Treasurer Janet Alexander said.
The combined tax rate for the city, Franklin Community School Corp., county, township and library is still more than $3 per $100 of assessed value. That means Franklin residents and business owners likely won’t get lower tax bills because most are still above the 1 percent cap for homes or 3 percent cap for business, Alexander said. If their property values went up, they’ll end up paying more because the cap will be higher.
In areas where property values didn’t grow as much, increases in spending resulted in higher tax rates. The Clark-Pleasant Community School Corp. rate increased 2 percent because the school district increased spending on debt, transportation and bus replacement, but property values didn’t keep pace, director of business Steve Sonntag said.
Property values have increased about 1 percent in the school district since last year. Meanwhile, debt payments for Clark-Pleasant schools will continue increasing until they top out in 2016 and 2017, and the school district will need to start spending more on transportation, Sonntag said. The district hasn’t purchased new buses in about five years, and the older fleet is requiring more maintenance. Clark-Pleasant also loses about 54 percent of its annual taxes because of property tax caps, so new spending is limited.
The Bargersville fire district, which serves about 25,000 residents in parts of White River and Franklin townships and most of Union Township, increased its tax rate to start saving money for future fire engine or ambulance purchases. In the past, the fire district has taken out loans for new vehicles, which caused property taxes to rise to pay for the debt. The tax rate increased this year, but with the added money, officials want to be able to borrow smaller amounts or not borrow at all in the future, Chief Jason Ramey said. Tax rates should go down because the fire district is paying off old debt and won’t replace it with new large loans, he said.
“You’ll see a dramatic decrease in the debt rate,” Ramey said. “We don’t want to be in a position where we have equipment failing and things falling apart and then have to go ask the public to fund a new bond. Basically that flat-lines out that tax rate so everyone knows what to expect.”
Paying off a loan and not borrowing more can result in a large decrease for small taxing units, such as in the Whiteland Fire District this year, which serves the town and nearby areas. The fire department paid off a loan for the fire station and some equipment, which dropped the tax rate by about 60 percent, Chief Dave Gabbard said. A homeowner with a $100,000 house would save about $53 in taxes per year because of the decrease.
“We’ve done everything we could in the last eight to 10 years to keep as much spending down as possible, do as little as possible. With fuel increases and insurance increases, we’re always trying to find ways to save money somewhere,” Gabbard said.