Greencastle Mayor sounds warning of potential property pax cuts

"It's a little frightening."

Those are the words of Greencastle mayor Lynda Dunbar as she waits to see what the Indiana General Assembly will do with property taxes. 

While she waits, Dunbar is wasting little time sounding the alarms of what a reduction in revenue generated from property taxes could mean for her city. 

Dunbar told The Putnam County Post discussion of what happens with property taxes will have an impact on everybody.

"I was at a mayor's roundtable and I will tell you all the mayors, whether they are Carmel's mayor or the mayor of Greencastle, we are all very concerned about the outcome of this bill and what it will be to us," Dunbar said.

Indiana Governor Mike Braun offered a solution to the General Assembly that would cap annual increases on property taxes for all property types at three percent. With that said, however, home owners ages 65 and over, who have minor children or who are low income, would see an increase capped at two percent. In addition, the homestead deduction for houses worth less than $125 thousand would be raised and there would a property tax transparency portal set to go live as well.

The first term mayor said it is her hope that residents understand most of the city's funding to operate comes from property taxes.

"I know nobody likes to pay taxes. I don't like to pay taxes, but it is what we use to function on. If we start to see major decreases in property tax that we receive, then the first thing we have to do is decide what we are going to cut. The priority, of course, is everyone wants us to keep police and fire fully staffed, but if we can't, you are going to see slower response times and things like that," Dunbar said. 

Dunbar said potential cuts would also have ramifications on the talent Greencastle can attract when it comes to city jobs, especially public safety. 

"A lot of mayors have talked about how they will not be able to raise wages for police and fire. Everything is going to level off. In response to property taxes, we are all in the same boat. We are all seeing cuts if we see less property taxes. As a result, this community or that community will not be able to pay more to get people to come over," Dunbar said. 

She said she has told all department heads that spending will be curbed in the interim, as city officials wait for a clearer picture.

"We told department heads that we won't do certain things. We are just being cautious, but we will continue doing what we can," Dunbar said. 

In addition, Dunbar said potential cuts could have an impact on Greencastle's ability to become a "proactive city."

"I did just get a new planning director, and we may need to take a step back and be unable to do several things," she said.

Should the property tax be taken away from local governments, Dunbar said there will be a new mechanism in place to generate funds.

"I think what is in the pipeline is we will cut property taxes, but city's would then be able to do a local income tax. Property taxes will be lower, but the City of Greencastle will have to be that bad guy and do a local income tax to recoup that money. What people forget is if you take something away, something else is going to have to pick it up. A big push is for cities to do their own thing to be sustainable. We charge $25 on cars for roads and will be eligible for large grants, like community crossings. I caution everyone there will be something else that we will tax you on. I hope the legislators get with clerk-treasurers and mayors to understand how the mechanisms work. It'll be interesting, and we are waiting to see what comes down the line," Dunbar said.