Homeowners in Seymour likely will pay more in property taxes this year than they have been paying in recent years.
The reason behind the increases stems from a decision about property-tax relief made by the county council in September of this past year.
That decision involved the implementation of a Local Option Income Tax of a quarter of one percent of every $100 in income to provide property tax relief.
“We had two options,” Councilman Brian Thompson said. “We could have given it all (the relief) to residential homeowners or spread it out to the owners of all property classes.”
He said the council talked about it and decided to try to even the tax burden for all.
“Continually over the last 10 years, homeowners have received credits, bonuses and deductions,” he said.
Other property owners including those of farmland, rental homes, apartments and commercial and industrial buildings did not received the same kinds of break, he said.
“We wanted to get back to more of a consumption/user fee and not so much one based upon the value of property,” Thompson.
To spread the relief out equally, the council decided to allocate the property tax credits nearly evenly across the three types of property: 34 percent for those with homestead owner-occupied primary residences including mobile homes; 33 percent for those with second homes, rental homes, apartments, farmland; and 33 percent for commercial, industrial, utility land and buildings and business and agricultural equipment.
That decision, however, negates a decision the county council made back in 2005 when as the state was talking about eliminating the business inventory tax to make the state more attractive to business and industry.
At that time, counties were allowed to increase their economic income development tax. The new revenue was to be used to lower property tax bills for property owners with homestead exemptions as their property taxes rose in response to the loss of inventory tax revenue.
At that time, the council could have distributed the new revenue evenly to property owners with homestead exemptions across the county but opted to give the nearly half of the property tax relief to homeowners in Seymour because most of the inventory was located in the city.
There was a third option — doing nothing and allowing the inventory tax to expire and leaving rates alone, but that option was rejected.
The state abolished the inventory tax in 2007.
The tax credits were first applied to property tax bills in 2006 and those credits have remained in place for the past 10 years for property owners with homestead exemptions until the decision by the council this past September.
In 2016, the credit for homesteads ranged from 48.3635 percent in the city of Seymour to 1.7687 percent in Driftwood Township
Seymour’s tax rate in 2016 was 2.5387 per $100 assessed valuation which means a homeowner with a home valued at $100,000 would have paid $253.45.
With their 48.3635 percent credit, however, their bill would have been reduced by $122.78 for a total bill of $130.67
The property tax rate in Brownstown in 2016 was 2.4834 per $100 assessed valuation so a homeowner there with a home valued at $100,000 would have had a property tax bill of $248.34. With a 8.1345 credit, their property tax bill would have been reduced by $20.20 for a total bill of $228.14.
Because of the county council’s actions, every homeowner in the county receiving the homestead credit in 2017 will see their property tax reduced by 31.9952 percent.
That means that the owner of a home with $100,000 assessed valuation in Seymour, which has a 2.5802 rate this year, would pay $258.02 minus a $82.55 credit for a total bill of $175.47. In Brownstown, where the property tax rate is 2.5791, the homeowner of a home with an assessed valuation of $100,000 would have a $257.91 bill, but with an received an $82.52 credit and have a total bill of $175.39.
Overall, all but two of the 17 taxing districts in the county saw their property tax rates go up this year from 2016. The largest increases occurred in Vernon Township where rates are up 13.26 from 1.4911 in 2016 to 1.6888 this year and Crothersville where rates rose 11.27 percent from 1.9052 in 2016 to 2.12 this year.
The only declines occurred in Carr Township, where the rate fell to 2.4238 this year from 2.5709 a year ago (6.04 percent) and Medora, where the rate fell to 3.2749 this year from 3.3788 in 2016 (2.08 percent).
[sc:pullout-title pullout-title=”By the numbers” ][sc:pullout-text-begin]
Grassy Fork Township;1.4809;1.5421;4.13
Seymour (Jackson Township);2.5387;2.5802;1.63
Seymour (Redding Township);2.5345;2.5750;1.60
Salt Creek Township;1.5865;1.6588;4.56