Just how deep is the debt in St. Joseph County?

Last week’s passage of a property tax relief plan in the Indiana General Assembly focused attention on the borrowing habits back home.

The plan gave special treatment to St. Joseph and Lake counties, because both had debt levels that exceeded 20-percent of assessed valuation.

That special treatment shocked and surprised some local lawmakers. “I think it’s inexcusable,” said Ind. Rep. Jackie Walorski, (R) Lakeville. “To have a 22 percent debt like St. Joe County has for a county our size, the rest of the counties around our state are not in this situation.”

“I think this is an opportunity for taxpayers in this county to understand that every time they pick up their paper, or turn on their local newscast, and find out there's a new bond is being floated, there's a new this and a new that,
their paying for it,” Walorski said.

St. Joseph County’s outstanding debt is $58.6 million. That’s 23-percent of the county’s total assessed valuation.

The biggest borrowers are school corporations. The South Bend Community Schools owe $20.7 million. The Penn Harris Madison system has $15.9 million in outstanding debt. The Mishawaka schools have $6.3 million in outstanding debt. The County of St. Joseph itself has $5 million in borrowing on the books.

“The cities and towns have option tax dollars that they can pledge to do capital projects,” said Senator John Broden, (D) South Bend: “the schools almost always rely on property taxes for their projects, but St. Joseph county's debt, is not outside the norm by any means.”

St. Joseph county’s debt does stand out when it’s stacked up against that of neighboring counties. LaPorte County’s debt is 9.2 percent of its assessed value, while Elkhart County’s is only 5.7 percent.

Further from home, Lake County’s debt is 34-percent of a.v. (assessed value), while Delaware County’s debt is 17-percent.

The decision to deal with St. Joseph County’s debt outside of the tax caps will have an impact on local homeowners.

While everyone else in the state will presumably see their taxes capped at one percent of the home’s assessed value, residents living in South Bend/ Penn will pay, on the average, 1.34 percent. In Lakeville/ Union Township homeowners will pay an average of 1.1 percent.

“We had a choice,” said House Speaker B. Patrick Bauer, (D) South Bend. “Either paying a one percent income tax or a slightly higher, for a few years, one or two tenths of a percent, (above the cap) to pay off that bond.”

Bauer said the choice was easy. “Certainly once you're starting to go over one percent, (on the income tax) you’ve got another problem. People will be coming back in for income tax relief.”