Our limited look into the circuit breaker seems to indicate that homeowners should not hold their breath.
They do not appear to be the big winners in the latest program to reduce property taxes.
“In order to sample a variety of homes in all corners of the city of South Bend We applied the circuit breaker to the tax bills of the six district representatives on the city council,” says St. Joseph County Deputy Auditor John Lentz.
Only Councilman David Varner stood to see circuit breaker savings at home.
The tax cut amounted to eight percent.
With Deputy Auditor John Lentz at the controls,
we then checked the bills of all three St. Joseph County Commissioners, only to find the circuit breaker did not save any of them a single dime.
Same goes for the homes of the mayors of Mishawaka and South Bend,
Although we hit pay dirt, when we looked at a rental property owned by Mayor Luecke, and found a circuit breaker tax savings of more than 1,500 dollars. “It will save him more than half of what he is currently paying in property taxes,” explains Lentz.
“For me, it's a Jekyl and Hyde situation. I think the cap is appropriate,” Mayor Luecke says. He is one of the circuit breaker's biggest critics, although that doesn't mean he hates everything about it.
He thinks high taxes on landlords helped create the city's vacant property problem, and that the circuit breaker may be the solution. “We recognize that the property taxes had become onerous for some people. From that perspective it's very positive.”
But the mayor also sees his ability to provide a safe level of city services threatened, by the circuit breakers resulting loss of revenue.
And he wants the chance to recoup that somewhere else. “Most likely we'll see an opportunity for an additional income tax, but perhaps a sales tax as well at the local level,” Mayor Luecke explains. “If we fail as cities and towns, the state will fail, and I'm sure the legislators understand that, that's why I have optimism.”
So homeowners beware, our circuit breaker breakdown actually looked at a dozen owner occupied homes in all, and found that only one was in line to get a tax cut.
It was not the best of odds.
Why the big break for the rental property?
During the reassessment in 2003, homeowners were protected. They got increased tax exemptions that landlords did not
That left land lords paying the highest bills.
The bills were so high they qualify for relief under the circuit breaker cap.