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New Local Government Podcast: A Non-Binding Recommendation

Here is a new podcast from Purdue University Economist Larry DeBoer. The topic is A Non-Binding Recommendation. It is available in both mp3 and wmv formats.

Local Budgets & Circuit Breakers Program Now Online

The On Local Government program from June 26, 2008 is now available online for viewing. Here is the link. The handout is available here.

New Local Government Podcast: A Tax Echo for 2009

I'm a little late getting this posted but here is Larry DeBoer's Capital Comments podcast for May 28, 2008. The topic is A Tax Echo in 2009. It is available in both mp3 and wmv formats.

Supporting Materials for the June 26 On Local Government Program

The following are materials to support the On Local Government program with Larry DeBoer scheduled for 2-4:30 pm (EDT) on Thursday, June 26, 2008. Included below is the PowerPoint presentation Larry will use during his talk, a handout, discussion questions, and an evaluation form.

Along with the multiple viewing stations across the state, the program can also be viewed online via live video streaming. To access the online version, click here at 2 pm EDT. If you are viewing online and have questions during the program, please email them to me. Larry will get to as many questions as possible. The program will also be archived for online viewing later. That URL will be provided when it is available. Here are the supporting documents:

• Handout
• PowerPoint
• Discussion Questions
• Evaluation Form

Podcast Now Available: Indiana Circuit Breakers

We're glad to make available this inaugural On Local Government podcast featuring Economist Larry DeBoer (Purdue University Department of Agricultural Economics). In this month's podcast Larry explains the Indiana circuit breaker. You can download this and load it to an iPod or listen online with QuickTime or Windows Media Player. The two formats are listed below:

• April 2008 Capital Comments Podcast (wmv format)
• April 2008 Capital Comments Podcast (mp3 format)

Extension Educators, you may consider burning this podcast to a few CDs and dropping them off with folks in your community who might be interested but may not be likely to listen online.

April 25 Local Government Finance Program Now Online

The On Local Government program from April 25, 2008 is now available online for viewing. Here is the link. The handout is available here.

Materials for April 25 On Local Government Program

The following are materials to support the On Local Government program with Larry DeBoer scheduled for 2-4:40 pm (EDT) on Friday, April 25, 2008. An overview of the program is available here. Included below is the PowerPoint presentation Larry will use during his talk, a handout, and an evaluation form.

Along with the multiple viewing stations across the state, the program can also be viewed online via live video streaming. To access the online version, click here at 2 pm EDT. If you are viewing online and have questions during the program, please email them to me. Larry will get to as many questions as possible. The program will also be archived for online viewing later. That URL will be provided when it is available. Here are the three supporting documents:

• PowerPoint presentation
• Handout
• Evaluation (to be returned to me after the program)

Local Government Finance: A Legislative Wrap-Up Summary

Purdue Economist Larry DeBoer has provided the following wrap-up of the recent Indiana Legislative session.

HEA1001 is the biggest, most important reform in Indiana local government finance since 1973, at least.

Here are the essentials.

The state will take over the remaining school general fund, the county welfare funds, and a few smaller funds.  State spending will rise by these amounts, and the tax levies and rates for these funds will disappear.  The state will pay for the added spending with an increase in the state sales tax from 6% to 7% (as of April 1), and by redirecting existing property tax relief spending.  That means the property tax replacement credits and state homestead credits will disappear, too. 

Added property tax relief will be channeled to homeowners with a supplemental homestead standard deduction, equal to 35% of a home’s value after the existing $45,000 deduction is subtracted.  This reduces the tax base, and so makes property tax rates higher than they would have been.  Post-reform tax rates will be near the current rates less credits.  That means most taxpayers other than homeowners won’t receive much property tax relief.  This is very much a bill to deliver property tax relief to homeowners.

The income tax deduction for renters will rise from a $2,500 maximum to a $3,000 maximum, and the Indiana earned income credit will increase from 6% to 9% of the Federal credit.  This will help offset some of the sales tax increase for renters, who do not receive direct relief from the property tax reductions.  Lower income homeowners will receive additional relief through an increase in the maximum share of assessed value that can be taken with the standard deduction.  It was $45,000 up to 50% of assessed value, now it will be $45,000 up to 60% of assessed value.

Lower income homeowners age 65 and over will be allowed to freeze their property tax payments.

These measures will phase in over the next two years.  This year there will be a substantial increase in homestead credits, financed by the April 1 sales tax increase.

The circuit breaker credits will limit homeowner taxes to 1% of gross assessed value (that’s market value before deductions are subtracted).  Rental housing and farm land taxes will be limited to 2% of assessed value, and other taxes will be limited to 3% of assessed value.  This is in law, and will fully phase in by 2010.  A constitutional amendment resolution was also passed, to put these limits into the constitution.  That starts the amendment process.  Lost revenue from circuit breaker credits will not be replaced, and estimates show total losses to local governments to be in the $500 to $600 million range.  Owners of rental housing will be the chief beneficiaries of circuit breaker tax relief.  Governments in Lake and St. Joseph Counties will exempt debt service taxes from the circuit breaker limits. 

Township trustee assessment duties will be moved to the county assessor, but the township trustees will keep their positions.  Elected township assessors will be eliminated, except in townships with more than 15,000 real property parcels.  Township voters will decide whether to eliminate these assessors in November.

Bigger school and other capital projects will be subject to referenda.  Smaller projects will still be subject to petition-remonstrance.

Some things that were considered did not pass:

• New local spending controls based on county personal income growth will not be imposed.
• The three local income taxes authorized in 2007 continue to exist.  This includes the public safety income tax.
• Few of the Local Government Commission reforms were considered (that’s the Kernan-Shepard commission).  Most township assessors were eliminated, and the county council was given some added oversight over capital projects.  That debate is still to come, if it happens at all.

Indiana's Property Tax, 2008

The Winter 2008 workshop of Purdue Extension ECD's On Local Government series was conducted February 1st. About 30 locations from across the state hosted 200-plus local government officials to discuss this important issue with Professor Larry DeBoer. If you missed this event, you can view the streaming video here You may want to grab a popcorn and soda from the concession stand because it is about 90 minutes. Trust me, it goes fast. Larry may be the only man in the world who can make property taxes both informative and entertaining! Two supporting documents are also provided:

• PowerPoint
• Handout

Feb 25 Update: Dr. DeBoer responded to many questions during the video workshop but time did not permit him to get to all of them. The additional questions have been answered in writing and are available here.

 

Hot Topics in Indiana Local Government

Purdue Professor Larry DeBoer has recently updated his Indiana Local Government website with some great information about Legislative Services' revised analyses of HB1001, the property tax reform bill. There's a memo on the Tax Shifts for the bill as introduced, another memo for the bill as passed, and another on the Circuit Breaker.