5 August 2010
expected sharp decline in local taxes Ind.
Posted by selfprofit under: Annuity; Education; Real Estate; Retirement; Web .
FORT WAYNE, Ind. – Local governments across Indiana are projected to see big declines in their income tax revenue in the coming year, which will follow budget troubles that many have already seen from statewide property tax caps.
New income tax projections from the State Budget Agency show revenue declines of 18 percent to 20 percent for many counties during 2011 .
“2011 is the year the recession hits local government in Indiana,” said Larry DeBoer, a Purdue University economist who studies Indiana’s tax system.
DeBoer told a meeting of Allen County officials on Tuesday that with less money from property taxes, local governments will have to rely more on unstable revenue sources such as income taxes and fees.
Allen County, which includes Fort Wayne, is projected to see a $16.6 million, or 21 percent, drop in income tax revenue. Although the drop isn’t as great as the $24.6 million local government lost to the property tax caps this year, DeBoer called it more gloomy news for public officials faced with deciding budget cuts.
Fort Wayne city Controller Pat Roller said she was surprised by the projections and that they were much worse than expected.
Allen County’s government will have to rely more heavily on its rainy day fund to balance its 2011 budget, county Auditor Lisa Blosser said. The county had planned to use just $3.2 million from its savings account.
In November, voters will decide a ballot question whether the tax caps should be amended into the state constitution.
DeBoer said if the amendment is approved, it would tie legislators’ hands should they want to make significant property tax policy changes in the future. He expects to see counties and cities lobby for greater local control and flexibility to make up for lost funding.
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Online:
State Budget Agency 2011 local income tax report: http://tiny.cc/on8k2
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Information from: The Journal Gazette, http://www.journalgazette.net
Big drop expected from Ind. loca
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