About 30 area residents gathered at the Kosciusko County Farm Bureau Saturday for an update from local state legislators on what's going on at the General Assembly.
The legislators present were Dist. 18 Rep. Dave Wolkins, Dist. 22 Rep. Bill Ruppel, Dist. 23 Rep. Bill Friend, Dist. 9 Senator Ryan Mishler and Senator Thomas Weatherwax, all Republicans. The conversations mostly centered around property taxes and what the legislature may do to change the system through which state and local government is funded.State lawmakers have been under pressure to pass property tax reform this session after homeowners' bills increased by an average of 24 percent statewide last year. Saturday, the legislators talked of two similar bills, one from the House and one from the Senate, which would impose a caps on property tax bills. Each of the bills would limit homeowners' property taxes at 1 percent of their home's assessed value, rental property at 2 percent and business property at 3 percent. The bill that passed the House would begin the caps in 2009 and the Senate bill would phase the caps in by 2010.
Though some counties have expressed concerns to the legislature that the caps will mean major cuts and loss of services on a local level, Weatherwax said Kosciusko County would fare relatively well under the caps.
"Kosciusko County is blessed with a very good assessed value base," he said. "Not all counties in the state have this."
Weatherwax said, according to projections, Cass County could lose between $4 million and $5 million by 2010 as a result of the caps.
For Kosciusko County, Weatherwax said the impact would be closer to $180,000.
"This county can do that in a heartbeat," he said.
Weatherwax also said plans are in the works for the state to take on the costs of local school general funds and child welfare costs.
"There is no free lunch," he said. "We're going to raise the sales tax 1 percent to do it."
Weatherwax said he is concerned with how much extra cost the state is taking on.
"This is really putting us at a maximum level of what we can pick up," he said. "We're taking a big bite here and I know some of you think we should do more."
Several residents asked about how farm land would be assessed under the caps. According to the House bill, farm land would be under the 2-percent cap; according to the Senate bill, it would fall under the 3-percent cap. The 1-percent cap would only apply to homes and up to one acre of the land a home is built on. The rest would be considered farm land and fall under the 2- or 3-percent caps.
Friend said there also has been discussion of requiring public referendums for big-ticket public projects like new buildings. He said he doubts the referendums will help counties cut costs.
"If you're a homeowner at a 1 percent cap, you'll never vote against a building project," Friend said. "Rental property owners and businesses will pay for it."
Several residents also asked why the legislature doesn't eliminate property taxes altogether. Wolkins said he would support an effort to do so if it looked like it had a chance to pass.
"I would eliminate in a heart beat," Wolkins said.
He said he would rather base revenue on income tax.
Mishler said elimination of property taxes would have a significant, negative impact on Kosciusko County because of the large number of second homes around the county's lakes. Out-of-county owners of these homes would no longer contribute significantly to the county's tax base.
Ruppel said finding a solution to the property tax issues in the state is a complex process. He said it will be hard to please everybody and still get the bills paid.
"I can guarantee you, not everyone's going to like it," said Ruppel.
Mishler agreed. He said a lot of discussion and problem solving have to happen before any solution will become law.
"In the last two weeks of the session, everything is going to change," said Mishler. "Every county has its own situation. You have to find a happy medium."
