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Realtors: LOIT would cut property taxes in half


Huntington County Council members will take at least a month to decide whether to boost income taxes to knock down property taxes.

The council took no action Monday night, following a presentation on property taxes and a plea from a group of real estate agents to take advantage of the plan.

“We’re going to continue to discuss this,” said Kathy Branham, the council’s president, near the conclusion of the council’s September meeting Monday night. “It’s going to be on our agendas.”

Jim Wilson, representing the Huntington County Board of Realtors, urged the council to impose a 1 percent income tax on county residents – a move he said would reduce property taxes on all residential property by 50 percent.

Wilson’s group also wants the property tax cut to apply to all residential property, whether homestead (owner-occupied) or rental.

The discussion about property taxes opened with a presentation by Gretchen K. Gutman, an attorney with the Sommer Barnard law firm in Indianapolis. She gave a chronology of the Indiana General Assembly’s actions since 1973 – a litany of increases and decreases and exemptions that were implemented one year and taken out the next.

Gutman said 10 Indiana counties have approved what is called a LOIT (Local Option Income Tax), with an 11th, Howard, completing the process. Gov. Mitch Daniels has given counties until the end of the year to enact the tax to counteract property tax increases past, present, and future.

The phrase “dollar for dollar” has been used to describe the tradeoff, but Branham questioned Gutman about that. Branham noted that someone who earns $60,000 a year would have to pay an additional $600 in LOIT, but might not get $600 off of their property taxes. Gutman agreed; she said some large landowners might not have large incomes but some homeowners may have larger incomes but not all that much property. She referred to it as a “search for an equilibrium.”


Wilson said the real estate agents want the council to enact the local option income tax on all residential property.

“We, as Realtors, are on the front lines,” Wilson said. “We see hundreds of clients who are hurting due to excessive property taxes.”

He said the “redistribution” of the tax burden would be evident in Branham’s scenario. “The higher-income people would see an increase beyond the relief they’ll get in property taxes, but they have the ability to pay,” he said.

He also said it was important for the council to act by the end of the year to decrease property taxes next year. He said foreclosures are bad now, but the situation will be worse if property tax relief doesn’t come about.

“We have a problem that needs attention now,” he said. “We desperately need this to be done this fall” or next year “will be a catastrophe.”

Council member Don Davenriner asked about sales tax increases or other options other than income taxes. Gutman said LOIT was the only option legislators gave to local governments.

State Rep. Dan Leonard, R-Huntington, said a legislative study committee is considering all options this summer. “But today, 1478 is law,” he said, referring to the number of the bill that allowed the local option tax. “You can adopt it, and that is the reason we brought it before you. It’s available today.”

The council is not scheduled to meet again until Oct. 22, when the issue will probably come up for discussion again.

By DAVE SCHULTZ, Huntington Herald Press


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