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South Bend Redevelopment Commission <br />Regular Meeting -March 2, 2007 <br />6. NEW BUSINESS (CONT.) <br />A. Tax Abatements <br />() continued... <br />would receive the abatement. <br />Mr. Peczkowski followed with the question <br />of whether Habitat would build the five <br />houses with or without the abatement. Ms. <br />Blosser responded that Habitat tries very <br />hard to secure the abatement for all of its <br />families. Mr. Peczkowski stated that if the <br />tax rate was lower, tax abatement would not <br />be necessary. Why not cut through the red <br />tape and have a fair property tax in place to <br />begin with? Mr. Leone noted that the <br />Commission has very little control over the <br />tax rate. It's determined by the assessed <br />value and by the budget as submitted. <br />Property taxes as collected go 75% for public <br />safety services. There is a trade-off between <br />the services that are necessary and required <br />and the amount people are willing to pay for <br />those services. A lot of the law controlling <br />the tax rate is controlled by the legislature. <br />Some changes are expected as a result of the <br />2% circuit breaker which will be coming into <br />play for residential properties for 2007/pay <br />2008. That will make a difference in how <br />that tax abatement works for the property. <br />Generally, the circuit breaker will lower <br />taxes for residential properties, so it will push <br />city budgets down as well, unless there is <br />some kind of corresponding sources of <br />revenue. <br />Mr. Inks noted that the circuit breaker works <br />well for rental properties. It doesn't work as <br />well for owner occupied properties. In lower <br />cost homes, there will be little impact on the <br />6 <br />