Larry DeBoer, Purdue University professor of agricultural economics, explains to Clark County officials that the "circuit breaker" system of property tax caps now in play in Indiana means officials in all taxing districts of a county are going to have to work together:
DeBoer explained how the new model of property taxes works. Each taxing entity sets a rate. Those rates are added up and that's the final tax rate. However, if it's over the circuit breaker, everyone loses, even if just one group asked for additional funds. The money to make up the amount over the caps is taken out of each group, based on the percentage they asked for in taxes.
“In a sense, no one can budget, until everyone budgets,” DeBoer told the group, explaining that one taxing group's costly project will influence all the taxing entities.
DeBoer said what officials will need to do is "simulated tax billing," which means plugging in estimated numbers and seeing if the cap will be reached. This seems reasonable to me. I'm for local autonomy and taxing units being able to respond to the needs of their constituents, but they too frequently work in a vacuum, unaware of or at least unconcerned with what other taxing units are doing. So we see things like the huge library expansion, Harrison Square and the failed attempt at a $500 million school bond all bunched together. The circuit breaker will our officials at least talk to each other about big projects.
