Landlords Rally in South Bend to Push for End to Property Taxes

by Troy Kehoe (tkehoe@wsbt.com)

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Landlords Rally in South Bend to Push for End to Property Taxes

By WSBT News1

Story Created: Sep 13, 2007 at 8:43 PM EST

Story Updated: Sep 17, 2007 at 9:40 PM EST

(WSBT) Calls continue to grow for an end to Indiana property taxes. The latest came Thursday in downtown South Bend, as landlords and tenants from the Real Estate Investors Association of North Central Indiana marched to demand a change.

Some say if that change doesn't come, it could force them out of business. South Bend landlord Penny Hughes is one of them.

"I made $50 profit last year," she said when asked about one of the 35 properties she owns in the city.

The low numbers follow huge increases in property tax assessments she received this year.

"It's forcing landlords out of the business," she continued. "And good landlords you don't want out of the business. They're the ones that have been keeping the neighborhoods up!"

It's not just landlords being forced to shoulder the extra burden. Many at Thursday's rally say they've been forced to pass on the extra cost to their tenants. Nearly 40 percent of the South Bend Metro Area's housing are classified as "rentals."

Many say they can't pass on the entire cost.

"That's $75 to $100 a month extra," said REIA President Edi Mathis. "Our tenants can't afford that."

So, in many cases, landlords are stuck paying the higher rates because they don't qualify for the state's homestead credit. And that's on top of already rising assessments.

Now, rental units don't qualify for the new 2 percent circuit breaker tax cap either. Local taxing bodies pleaded with lawmakers for some way to add extra revenue in the face of massive projected cuts, so late last spring, rental units and commercial properties were capped at 3 percent.

Some say, that's not fair.

"You can't just put it on the backs of landlords and tenants," said Hughes.

They're pushing for a lower cap and a homestead extension to rental housing as a short term solution, but others are convinced that won't solve the problem.

"Getting rid of [property tax] completely is a necessity," said South Bend landlord Bill Stroup, who held a sign bearing the words "Eliminate Property Taxes Now."

REIA plans to take that message directly to the statehouse in Indianapolis Monday. But some lawmakers are already on board with the idea.

State Representative Jackie Walorski of Lakeville has supported a plan to end property taxes since it was first introduced last spring. Now, she says the idea of a phased-in plan is gaining steam, and 75 percent of her Republican caucus agrees.

"Not one of the four plans calls for the doubling of income or sales tax that some have criticized," she told WSBT from the state capitol. "They all call for a phase-in. The rank and file legislators, the ones I'm talking to on both sides of the aisle, a bi-partisan group, get it now. The question will be, are the leaders of the legislature going to move on that?"

Rep. Walorski says the answer may not be clear until lawmakers return for committee and caucus meetings in November. The legislature resumes session in January.

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