Mayors lobby for changes to property tax plan

by Samuel King (king@wsbt.com)

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Mayors worried about the impact of property tax reform on local governments

Mishawaka Mayor Jeff Rea (left) and Goshen Mayor Allan Kauffman (right), like other mayors across Indiana, are worried about the impact of property tax reform on local governments. (WSBT photo)

By WSBT News1

Story Created: Mar 11, 2008 at 3:24 PM EST

Story Updated: Mar 11, 2008 at 3:54 PM EST

GOSHEN -- State lawmakers are nearing the deadline to reach a deal on property tax reform. They have until Friday at midnight to come up with a plan. Mayors from cities and towns across the state say they think something will pass before Friday, but they're also worried it could have a devastating impact on local governments.

The Legislative Service Agency estimates South Bend would lose $26.8 million in revenue by 2010, Mishawaka would lose $6.8 million, Elkhart would lose $3.5 million and Goshen $2 million.

The mayors say they would have no choice but to cut essential services, including public safety.

“Everybody will feel the pinch of this, including our public safety departments,” said Mayor Jeff Rea, of Mishawaka. “We've been very honest with our policemen and firemen about that. That will be one of the last things we cut.”

Elkhart Mayor Dick Moore told WSBT News he’s already asked city departments to cut their budgets by 15 percent, if possible.

“To practice austerity and be as conservative as we possibly can and prepare for that eventuality, to prepare for the worst scenario we can think of, which is the loss of money,” Moore said.

Goshen Mayor Allan Kauffman says he will propose a trash collection fee, among other things, to help make up the revenue.

He says taxpayers will be in for a big surprise.

“They'll be happy for a property tax reduction, but they're not going to be happy with service cuts or a new trash fee and stuff like that,” Kauffman said.

As president of the Indiana Association of Cities and Towns, Kauffman's tried to lobby lawmakers to allow local governments to raise their own revenues to make up for the projected losses.

“There are some legislators that say don't worry about this, we'll fix it next year,” Kauffman said. “If they lower taxes this year, what's the political will going to be next year to raise the taxes to fix the problems they created this year?”

The mayors say they will have a better idea after the plan is passed. Gov. Mitch Daniels has said if lawmakers do not pass a property tax reform plan, he will call them back for a special session.

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