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Department of Local Government Finance

DLGF > News & Calendar > News Releases > Media Release Media Release

For Immediate Release

Governor extends deadline for counties to use new revenue flexibility tools

INDIANAPOLIS (July 11, 2007) – Governor Mitch Daniels said today he will extend the deadline for counties to decide to use other available revenue tools to help them reduce local property taxes. Legislation enacted earlier this year gave counties the authority to adopt local option income taxes. The law says that counties must decide by August 1 to use the tools for next year’s budget. The governor, operating in accordance with state statute, has extended the deadline to October 1.

Additionally, the Department of Local Government Finance (DLGF) is beginning to analyze commercial and industrial parcel data for Marion County that it received late yesterday. This review will help determine if assessments between residential and commercial properties are fair or if a reassessment for Marion County will be ordered and what the scope, timing and cost of such a reassessment would be.

The governor also said today he would have more announcements soon about other ideas he is considering for short- and long-term property tax relief and reform.

In 2002 tax restructuring, counties were allowed to eliminate the inventory tax and replace the lost revenue with a local option income tax. Forty-three counties exercised this option.

This year, new county income tax tools were enacted in House Enrolled Act 1478 to provide local property tax relief. Counties can choose to implement an incremental local income tax to generate budgeted revenue growth rather than raising property tax levies. The cumulative incremental tax rate may not exceed one percent.

Counties also may adopt a replacement local income tax of up to one percent to replace property tax net levies on a dollar-for-dollar basis. The relief can be applied to homesteads only, homesteads and rentals, or all property.

“It’s a very powerful tool, but I do understand that communities that have only just seen the extent of the problem could well use some more time,” said Daniels of the two-month extension.

The governor will send a letter to all county councils to notify them of the extension.

Earlier this week, the governor directed DLGF to approve any county’s application to permit homeowners to pay their property taxes in installments and to extend bill due dates and ordered the Indiana Bond Bank to facilitate short-term financing by local governments that need cash while awaiting these installments.

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Office of the Governor media contact: Jane Jankowski, 317/232-1622

2007 News Releases (View)