Catching up

The Department of Local Government Finance announced updates on the reassessment quality of 14 counties Friday -- including some of the state's tiniest. Problematic assessments of industrial and commercial properties spurred hearings in seven counties.

Still no word on Allen, the state's second-largest county.

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A new property tax proposal:

State Rep. David Orentlicher, D-Indianapolis, said Sunday that his plan to cut property taxes by $2.3 billion would give renters and homeowners some relief next spring while lawmakers work on long-term strategies for government reform. ...

Under Orentlicher's plan, about $1.6 billion in property taxes would be shifted to state sales and income taxes, which he said would have to be increased by 1 percentage point each: The income tax would grow from 3.4 percent to 4.4 percent, and the sales tax from 6 percent to 7 percent.

Another $300 million would come from increased business taxes, and $400 million in local expenses would be transferred to the state. Orentlicher said the state could cover that amount with its surplus and money from casino licensing fees.

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Meanwhile, a story in the Indy Star on Sunday about the costs of local schools borrowing to compensate for late and lower-than-expected property tax revenues.

Recent borrowing through the Indiana Bond Bank, an agency created by the Indiana General Assembly that helps municipal agencies with financial issues, tells the story. In June 2006, schools lined up to borrow $40.8 million. This June, schools borrowed $236.4 million. ...

In some counties, including Marion County, the state has ordered property tax bills frozen at the 2006 level until a reassessment is completed. In other counties, property tax bills went out later than usual because of delays in completing the property reassessments.

In either case, schools, which often plan their budgets 18 months in advance, faced the opening of a new school year short of cash.

Indianapolis Public Schools, for example, was anticipating receiving about $211 million in property taxes in 2007. Because of the state's order, IPS expects to receive about $175 million, or the amount it received last year, said Rodney Black, the school district's business manager.

Black said the district could end up paying $1 million in interest on money it wasn't expecting to borrow.

-- Tracy Warner