Property Tax Disaster?

There is no shortage of politicians looking for a fix for Indianas skyrocketing property tax bills. The problem is, right now, none of them can seem to agree on what needs to be done. The Indiana Association of Cities and Towns is hoping to influence law makers to change the way municipalities are funded. "We simply have to get property tax relief passed this session, along with reforms that give local governments alternative revenue sources that steer us away from a reliance on property taxes," said Huntingburg Mayor Gail Kemp. She heads the Association, and is one of many Hoosier mayors weighing in on the debate. Taking city and town funding out of the property tax equation would help ease the burden on home owners, but there are several other factors that have caused tax bills this year to skyrocket into what Indianapolis Mayor Bart Peterson has dubbed "a property tax perfect storm." Among those factors, the phasing out of the states business inventory tax. Also to blame, trending, the new method used to assess property values based on real market prices. Some in the real estate business worry that spiking property tax bills could send a ripple effect through the economy, slowing home sales, and putting a pinch on retail sales as residents funnel their disposable income toward their tax bills and away from other purchases. Thats just what Evansville resident Tony Payne may have to do. Payne says his family tries to keep a close eye on their bottom line, but when he got his property tax bill, he had to start thinking about budget cuts. Paynes 1250 square foot ranch home on the citys north side nearly doubled in assessed value this year, and his property tax bill went up by 129%. "If were paying for a family vacation this year, there may not be one... were taking that much of a hit," Payne said. Hes not alone. This week, Indiana law makers got word that on average, tax bills are up 24% this year, and could go up another 11% next year. The original projection was an average increase of 14%. A spokesman for the Indiana Association of Cities and Towns called those numbers "astounding" and "unacceptable for homeowners." Members of the general assembly have hinted about extending the legislative session if some sort of relief package cant be found. That could include further tax exemptions, or perhaps a full restructuring of how tax money is dispersed. The session is slated to end at midnight on Sunday.