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http://heraldargus.com/archives/ha/display.php?id=371415

County’s libraries, justice system could be hit hard by circuit breaker
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Derek Smith, 1-866-362-2167 Ext. 13863, dsmith@heraldargus.com

LA PORTE COUNTY -- A circuit breaker law affecting property taxes could prove to be bittersweet for La Porte County residents.

While the pending circuit breaker will provide savings to homeowners and landlords by capping property taxes at 2 percent of a property’s gross assessed value beginning in 2008, it could mean less funding for county, city and township governments whose budgets rely heavily on property tax revenues.

Although any projected loss is purely speculative, one preliminary estimate issued by the Indiana Office of Fiscal Management and Analysis placed the total loss to La Porte County at more than $3.3 million annually by 2010, when the tax cap will be extended to businesses.

That number was based on 2006 statewide trending estimates, and may prove to be a low-end figure when county assessors finalize trending adjustments and when assessed value and levy growth rates for property values become known, the study reported.

Although she said she is in favor of measures that help homeowners save money, La Porte County Auditor Teresa Shuter is fearful that governmental entities, such as police departments and schools, won’t be able to recover from the loss of funding.

“People don’t realize that if it goes through, the (lost) money is going to have to be made up from something else,” Shuter said.

The loss may have to be made up by cutting some public services, she said.

While city governments and school corporations are the units likely to be hit the hardest, the tax cap will affect other public amenities as well.

Approximately 73 percent of the money La Porte County receives from property taxes goes toward the justice system, La Porte County Council President Jerry Cooley told The Herald-Argus.

This includes institutions like courts, the county jail, the sheriff’s department and emergency medical services, Cooley said.

“I would love to do away with property tax altogether, but in actuality, we’re just shifting where that money is going to have to come from,” Cooley said. “If you start cutting revenue, you have to start coming up with money to pay for it.”

This may lead to cutting back on the number of county employees in key services, Cooley said.

Other public amenities are expecting a less significant impact. According to an early estimate, the projected annual loss of revenue for Michigan City Public Library could reach $84,123 beginning in 2010, and the La Porte County Public Library could lose $33,815 a year.

Michigan City Public Library Director Don Golssinger said while that figure is substantial, the library should be able to budget accordingly.

“If it’s only $84,000, we’ll be able to continue our services and keep our staff,” Golssinger said.

Currently, the library draws 83 percent of its $2.3 million budget from property taxes.

“We’ll just have to keep an eye on it,” Golssinger said. “It’s good to know these things are coming, and if it does, we’ll deal with it.”

Another entity that will feel a loss of revenue is the Michigan City Sanitary District. The district is responsible for all sanitary sewers, storm sewers and catch basins in Michigan City and is set to lose $93,747 in revenue annually beginning in 2010.

It was earlier reported in The Herald-Argus that, according to forecasts provided by the La Porte County Treasurer’s Office, beginning in 2010 Michigan City schools could face a loss of $884,369 per year, and La Porte Community Schools a loss of $280,518 if the circuit breaker is not repealed.

Similarly, the annual budget losses for Michigan City government could reach $786,884, and those for LaPorte city government, $313,907.

[Ang]

This is a good argument for using Boat revenue to supplement property taxes.