Mishawaka Mayor Jeff Rea (left) and St. Joseph County Commissioner Mark Dobson (right) listen to local taxpayers and community leaders talk about the impact of property tax reform on local governments at a public forum on Thursday, May 15, 2008. (WSBT photo)
Story Created:
May 16, 2008 at 11:22 AM EDT
Story Updated:
May 19, 2008 at 10:55 PM EDT
INDIANAPOLIS (WSBT/AP) — The state is paying off its debt early and local governments and school districts may see some relief.
The state is repaying $212 million owed to local governments by the end of May.
That’s the last of what the state owes in property tax replacement funds.
“Revenues are running ahead of forecast somewhat, and spending has been below budget,” said Governor Mitch Daniels. “The combination gives us confidence we are going to turn in a fourth consecutive balanced budget and surplus this year."
Of that payout, St. Joseph County will receive about $8.6 million.
According to the governor's office, the money is property tax replacement funds that had been owed since 2002.
The state government delayed those payments to help fix its deficit.
It hopes paying back that money now will help counties that are facing revenue cuts because of changes to the state's property tax system.
“As we understand, there's not a lot of impact to the local government in St. Joseph County. There was not a lot owed," said county commissioner Mark Dobson. “But this will be hugely significant to the schools, and you're going to see some cash flow issues taken care of."
The Penn Harris Madison school district has a lot of questions about the money. They are questions the state couldn't answer for us.
But how much money PHM receives from property taxes is a concern.
“Unfortunately since property tax bills are not out, the school corporation had to borrow money just to get to June 30th at this time,” said Dr. Denise Seger, associate superintendent. “We don't know when the distribution will be, so we'll have to extend our borrowing until we receive the bulk of our monies."
Borrowing money means paying interest, which comes at a cost to taxpayers.
The auditors in each county will distribute the funds, but there are still a lot of questions about this payback.
St. Joseph County's auditor says they just found out about the money, and there’s a lot of confusion around the state. They don't know yet how the funds will be divided.
