October 18, 2022

Now That The Budget Is Over, Why Isn’t It Over?

Written By Curtis L. Coonrod [Revised October 14, 2022] Even though we adopted a budget, the State will change it, right? Probably. Most units are advised by their fiscal officers to advertise and adopt appropriations, rates, and levies that are too high for the State to approve. Consequently, the state will change them later. Why does our fiscal officer tell us to adopt a budget that is too high? Your fiscal officer does not necessarily know how much revenue your unit will have. Therefore, he does not necessarily know what appropriations you can afford. That will be determined later by State analysts. If the budget is adopted at a high level, the fiscal officer can negotiate the cuts with the […]
September 20, 2022

Impact of Annexation on Counties, Cities, Towns, and Townships

Written by: Curtis L. Coonrod and Benjamin W. Roeger If a city or town annexes territory, the county, and township lose revenue, right? Yes, but maybe not as much as you might think. There are many misconceptions about what happens to local revenue when a city or town annexes territory.   Here is a basic outline: Effect of Annexation on Cities (or Towns), Countries, and Townships (A) After annexation, the county and township may reduce their property tax levies voluntarily, but they are not required to do so. (B)  I.C. 6-1.1-18.5-12 and 13 (C)  If the LIT distribution of any unit is increased, as usually happens when a city or town annexes territory, the increase to that unit is made up […]
July 19, 2022

Property Tax Shortfalls are Common. Here’s how to Recover the Revenue.

Written by: Curtis Coonrod and Benjamin Roeger [Revised: 7/22/2022] A common occurrence amongst cities, towns, counties, and townships is that they often do not receive the full amount of property tax revenue that was approved in their respective original budgets. This issue can often be resolved, but it requires action on the part of local officials. A comparison between the amount of property tax revenue received and the amount expected in the original budget will typically reveal a discrepancy.  And while there exists a great deal of variance between the amounts associated with such shortfalls, it nevertheless remains prudent to compare how much is actually received to the budget. Unfortunately, a portion of this discrepancy may be due to circuit […]
May 20, 2022

Reallocate Rate Cap Credits

Written by: Curtis L. Coonrod, CPA, and Benjamin W. Roeger, CPA [Written: 10/19/21, Revised: 5/20/22] Property tax draws for most cities, towns, townships, and counties are reduced by rate cap credits. Rate cap credits are usually allocated in proportion to the size of each fund that has a property tax levy, except for debt service funds. However, the city or other local unit can change that allocation.  For example, suppose the Assistance Fund has $10,000 of rate cap credits and needs more money. The local government can reduce all or some of the Assistance Fund rate cap credits – up to the full $10,000 and increase the rate cap credits by a like amount in other funds.  The result?  Up […]