03-22-04 Personnel & Finance - Laserfiche WebLink

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B. Bill No 04-37 To Increase the Percentage Credit Allowed for Homesteads in St. Joseph County. Mayor Stephen Luecke made the presentation to the Committee and stated that through this Resolution the Common Council would cast all of the City's votes on the St. Joseph County Tax Council in favor of increasing the Homestead Property Tax Credit in St. Joseph County. Mayor Luecke explained that the previous maximum amount permitted by law was 8%but due to changes in the formula for calculation,the effective rate dropped to about 5%. The ordinance proposed by the St. Joseph County Tax Council moved the exemption tax credit back to an effective rate of 8%. The cost to the City in terms of loss of local tax dollars is about$1,000,000, but it will have the effect of decreasing by about 61/2%the property tax of individual homeowners on their total tax bill. The Mayor cited some examples as follows: A home valued at$150,000 would save the homeowner about$215/year in property tax; A home valued at$113;000 would save the homeowner about$144/year in property tax; A home valued at$63,000 would save the homeowner about$48/year in property tax; and A home valued at$50,000 would save the homeowner about$23/year in property tax. The revised rate would be automatic for anyone presently receiving homestead credit. Council Member Coleman asked when the new rates would take effect and the Mayor replied that it would be for 2004 taxes payable in 2005. Council Member Coleman also indicated that landlords will probably be present to voice their concern that this Bill does not offer any tax relief to them. The Mayor confirmed that an increase of the homestead tax credit would not affect landlords. However,their taxes will not be increased as a result ofhomestead credit to homeowners. Council Member Coleman asked whether anything was being done to give property tax relief to landlords. The Mayor responded that the Administration is reviewing other tools for tax relief There is a rehabilitation tax abatement that does not require Council approval and this is something which might be of interest or help to landlords. Council Member White suggested that the Mayor address the issue of landlord tax relief at the time of his evening presentation to the Common Council. City.Clerk John Voorde asked whether the Administration knows whether tax bills to homeowners who have appealed reassessment will be issued by the May 10, 2004 deadline. The Mayor stated that he had no firsthand knowledge,but doubted that the deadline would be met. Committee Member Varner moved to send Bill No.04-37 to the full Council with a favorable Page-2-