Recent releases have shown that Clinton County homeowners will likely see a modest increase in property tax this year while most farmers
will experience a substantial increase following the increases experienced in 2023.
According to Larry DeBoer, an emeritus professor of agricultural economics at Purdue University, in 2022, Indiana ranked as the eighth lowest state for property taxes in the United States, which was a lower ranking than the surrounding states in the region, but many Indiana residents saw substantial increases in their property tax bills in 2023, which reflected the largest increase in gross assessed value in 20 years. DeBoer referred to the increase as the “Property Tax Shock of 2023” in a presentation to the Indiana County Commissioners Conference in November, and 2024 is looking toward continuing the “shock.”
DeBoer stated that the effects of the COVID-19 pandemic created the conditions for a rapid increase in property values with home prices rising due to lagging construction, material delays, increased demand and low mortgage rates, and farmland values increased in connection to rising grain prices.
Property values from 2021 were incorporated into gross assessed values in 2022 and appeared as the tax bills for 2023, resulting in the “shock,” and the tax statements for 2024 will showcase the property values for 2022 that determine the gross assessed values for 2023. Clinton County Council President Alan Dunn shared the reasoning behind the substantial increase for famers coming in the 2024 tax bill.
“Unfortunately, when these big increases in farmland assessed value hit, the high grain prices that led to the rise have often come and gone,” Dunn said. “Now, for example, corn prices are down 30 to 40 percent from where they were at their peak. For farmland owners, property taxes are a large item in their annual budget, so it’s important to know this increase is coming.”
Dunn further explained that the Indiana Department of Local Government Finance determines the maximum levy or the amount of money the county is permitted to raise from property tax, and the Clinton County Assessor calculates the county tax base or the total amount of assets subject to taxation, which leads to the tax rate.
“It is basically an algebra problem,” Dunn says. “We are solving for x, which is the tax rate. The county’s tax rate has actually been trending lower in recent years as assessed value growth has outpaced the increase in our tax levy.”
The Assessor’s Office assigns owners an assessed value for their properties, and values increase or decrease every year and are adjusted based on the changing market conditions through the process of “trending,” which leads to different equations for every homeowner. The assessed value multiplied by the county tax rate determines the amount that homeowners are billed for property tax.
“People are often confused about the tax cap,” Dunn says. “The cap is constitutionally set at 1 percent of your gross assessed value, so as the assessed value grows through annual trending adjustments, the cap grows as well. The cap is not static.”
According to the county government, this year’s county government tax rate is 66 cents per $100 and includes a new debt service tax rate of just under 11 cents for the first time. The new debt service tax rate is two cents lower than the initial projections according to Dunn, and the funds will be utilized to pay the annual bond payments resulting from the financing of the construction of the new county annex building. Dunn stated that the increased operational efficiency of the new annex will provide the county with lower operational costs that will increase savings that can be passed along to taxpayers in the future.
The Clinton County Treasurer’s Office must mail property tax statements by April 15 with the first payment due May 10, and the second payment will be due Nov. 11. For more information regarding the statements or payment information, visit clintonco.com/treasurer.