When it comes to property taxes, St. Joseph County is wrangling with local governments and school districts for a bigger piece of the pie.
That pie is shrinking because of a state law passed in 2008 called the “Circuit Breaker,” which caps property taxes paid by homeowners and businesses.
Property owners, local governments and school districts could be forced to give up tax money for the county to repair bridges and buy equipment.
Proposals to increase property tax rates for three funds come as state-mandated property tax caps are causing the county to lose millions of dollars in revenue each year.
At hearings next month, the County Council and Board of Commissioners will consider approving the rate increases. Some county officials support the idea, but others don’t think the time is right to increase taxes.
Because of tax caps, not all property owners would pay more taxes if proposals are approved. For cases in which money isn’t paid by property owners because their taxes are capped, the money would come from budgets of taxing entities.
On June 13, council members will consider increasing the rate for the Cumulative Capital Development Fund. Among other things, the fund is used for building repairs and to buy equipment, police cars and computers.
And on June 20, commissioners will consider increasing rates for funds they control: the Major Cumulative Bridge Fund is for the maintenance and repair of large bridges, and the Cumulative Bridge Fund is for small bridges.
Rate increases would affect only property owners whose taxes haven’t hit maximum rates allowed by the Circuit Breaker law, which caps property taxes at 1 percent of the net assessed value for homesteads, 2 percent for rental homes and agricultural land, and 3 percent for commercial and personal property.