No property tax 'relief' in Richmond Indiana

Supposedly our state senators led by elitist politician Teresa Lubbers are studying property tax repeal this summer over at the state house. Funny thing is, we've not heard a peep about how it is going. What they are really studying is how not to repeal property tax and, at the same time, keep the citizens from surrounding the state house with pitchforks and torches.

Meanwhile, we did hear from folks in Richmond Indiana via their local news that residents are seeing on average increases of 20% to 45% and that the property tax burden appears to be shifted to landlords and business owners.

Here's the story:
August 10, 2008
Farmers, business owners, landlords not feeling relief
Their property tax bills increase
BY PAM THARP, CORRESPONDENT
Not everybody is cheering the tax relief the General Assembly provided for homeowners this year.
Farmers, landlords and business owners are digging in their pockets to pay 2008 property tax bills that are 25 to 50 percent higher than in 2007, while homeowners are seeing similar reductions.

Farm manager Steve Slonaker of Centerville started sorting through a stack of property tax bills for his clients last week, but the news was so bad -- 20 to 45 percent increases -- he stopped looking at them.

"I was so disappointed, I quit for a while," Slonaker said. "We thought we were supporting tax relief. What happened?"

The skyrocketing taxes on rental housing are almost discriminatory against people who can't afford to buy a home, said landlord and real estate agent Terry Robinson of Richmond. Taxes on rentals are up 30 to 50 percent this year, he said.

"They think it just affects rich landlords, who ought to pay more anyway, but we can't charge any more rent," Robinson said. "At $850 a month rent, it's absolutely a negative for me. Nice rentals will disappear. We're going to have rentals in disrepair and foreclosure."

Businessman Terry Harkleroad said property taxes weren't reduced, only shifted from homeowners to landlords, renters and business and commercial property owners. The mortgage crisis and foreclosure epidemic is enlarging the class of people who are now renters, instead of owners, he said.

"Those Marion County homeowners who protested (last year) got their relief, but there is no association of landlords or renters and we got pushed into the corner. Tenants had no voice and they'll pay more rent. The next time the lease is up for renewal, they'll get walloped."
Small businesses also will feel the impact, Harkleroad said.

"It has the potential of putting some businesses out of business and government just keeps getting bigger," Harkleroad said.

The General Assembly did increase renters' Indiana income tax deduction this year for rent payments to $3,000, up from $2,500. The earned income tax credit for the working poor will jump to 9 percent, up from 6 percent, to help offset the one-cent increase in the sales tax that's paying for homeowner tax relief.

Some landlords may see tax reductions on rental properties in 2009 and 2010 because of the coming caps on property taxes. Rental and farmland taxes are capped at 2.5 percent of the property's assessed value in 2009 and at 2 percent in 2010. Homeowner taxes, though will be capped at a better rate, 1.5 percent of assessed value next year and 1 percent in 2010.

Slonaker predicted many farmhouse rentals will be demolished due to high taxes. Rents must rise to pay the taxes and it's already been difficult to get quality rural renters because of high gasoline prices, Slonaker said.

The state raised the base value of tillable farmland last year to $1,140 an acre, up from the $880 an acre used since 2005. The base assessed value for farmland increases to $1,200 in 2009, Union County assessor Diana Baker said.