The last state legislative session ended in a flurry with state lawmakers passing a law that has become known as the "2% Circuit Breaker." It's intended purpose was to cap your property tax payments at 2% of the assessed valuation of your property. Sounds simple and logical on its face. The side effects however, could be higher interest payments due to declining bond ratings; loss of funding for some schools, cities, libraries and towns where the total rate is over 2%; and possible loss of services and programs.
Proponents say people are worried over nothing. They evidently believe that rising property values will make this a non issue. (Reported here, in The Star.) Critics say the law was passed with absolutely no plan for replacing the lost funding. Critics also point out that if rising property values will keep the rates under 2% of assessed valuation then it's all a political lie anyway. If you still pay the same in property taxes then, "WHAT WAS THE POINT?" Was it just to pretend they lowered property taxes? Was it a pre-election year move?
Only time will tell if the lawmakers had intentions of passing some other type of revenue replacement for all the towns, cities, municipalities, schools and libraries that could lose funding as a result of this law. Or, only time will tell if property values rise so fast that most taxing locales end up under the 2% cap anyway.
Story from the Fort Wayne Journal Gazette this weekend is here.
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2 comments:
I do have hope that maybe, possibly, perhaps the "Kenley grenade" might result in tax reform. Putting school funding heavily on the back of property owners has been too convenient far too long.
I hope that the legislature can channel Doc Bowen and get a more equitable solution to this problem.
I acknowledge the unpopularity of the property tax itself. However, if all taxes were paid in installments a few times a year (or just reported to each tax payer )with a breakdown of what programs your taxes were paying for (like they do on property taxes), they might all be as unpopular. Then perhaps we could all debate on a level playing field what services are needed the most, and the fairest and best way to pay for such services.
I suspect one reason that property taxes are unpopular could be because it might be one of the most visible and easily understood taxes people pay.
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