Vernon Township fire territory would raise taxes for some

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Creating a fire territory for Vernon Township -- considered essential as the township outgrows its current emergency services -- will wind up costing some taxpayers more money. (Tom Russo | Daily Reporter)

VERNON TOWNSHIP — Taxes would go up for some property owners in northwestern Hancock County, and many taxing units would receive less funds than they’re used to if officials create a fire protection territory for Vernon Township.

Leaders are pursuing the territory to achieve 24/7 fire protection and ambulance service for Fortville, McCordsville and the unincorporated parts of Vernon Township. The township’s fire department is unable to sustain that level of service for much longer under its current financial structure.

During the first of three public hearings on the territory earlier this month, Paige Sansone, a partner with Baker Tilly Municipal Advisors, laid out what a new financial structure would look like beginning with taxes payable in 2021.

Sansone said the territory would set a maximum property tax levy to fund its operations that the Indiana Department of Local Government Finance would have to approve.

In its first year, the territory would cause Vernon Township’s district tax rate to increase 24.1%, Fortville’s to increase 16.3% and McCordsville’s 19.3%.

Owners of properties in those districts would only see their taxes increase at most by that much if they weren’t already at the state’s property tax caps, however. Residential homestead properties in Indiana are capped at 1% of their gross assessed value; farmland, residential rental and other non-homestead residential are capped at 2%; and commercial and all other property are capped at 3%.

Residential homesteads in unincorporated Vernon Township valued at $190,000 and more are currently hitting tax caps, Sansone said, meaning owners of those properties would see no change. A $150,000 home, however, would see its taxes increase by 10.3%, or $140. A $50,000 home would see an increase of $50.

In Fortville, which has a higher district tax rate than Vernon Township and McCordsville, all homesteads valued at $100,000 and more are currently hitting the cap. A $50,000 home would see its taxes go up $50, however.

Homesteads in McCordsville valued at $122,000 and more are currently hitting the cap. A $100,000 home would see its taxes go up $164 while a $50,000 one would go up $50.

Commercial properties in the unincorporated parts of Vernon Township would see the biggest tax impact from a fire territory. None are hitting the cap, so all would see a 24.1% increase in their taxes.

Conversely, in Fortville, all commercial properties valued at $1,000 and more are already at the cap and would not see any change to their taxes. McCordsville’s commercial properties valued between $500,000 and $5 million would see their taxes go up 19.3%.

For farmland, residential rental and other non-homestead residential properties in unincorporated Vernon Township — all such properties valued at $1,000 and more are already at the cap. In Fortville and McCordsville, all $100 and more are at the cap.

Vernon Township, Fortville and McCordsville property owners can use a tax bill calculator at gateway.ifionline.org/CalculatorsDLGF/TaxCalculator.aspx to get details on their own properties and use them to determine how the proposed fire protection territory would impact them.

The territory would also change how local income tax is split up among Hancock County’s taxing units.

“The more a taxing unit… collects in property taxes, the more the share of the county’s local income tax it will receive,” Sansone said. “So if a unit establishes a fire territory, they’re increasing their overall levy and therefore will get additional local income tax dollars.”

That means Vernon Township would get an estimated $140,182 more in local income taxes between 2021 and 2023, Sansone continued. Fortville would get an increase of $360,417 for the same time frame. McCordsville would get almost $600,000.

The rest of Hancock County’s taxing units would see a negative net impact for their local income taxes from 2021 to 2023 due to a Vernon Township fire protection territory. County government’s hit would be more than $428,000. Additionally, the territory would cause a net negative impact of more than $100,000 in vehicle excise taxes for the county between 2020 and 2023, according to Sansone’s estimations.

County taxing units were also projected to experience revenue losses if the Indiana General Assembly had allowed Vernon Township to increase its maximum property tax levy to remedy its fire service financial woes. That was the township’s original plan, but it was unsuccessful in the legislature and is now pursuing the fire protection territory.

Despite the estimated losses for the county’s taxing units under the original plan, many of their representatives said it would be worth it for Vernon Township to get where it needs to be.

Bill Bolander, president of the Hancock County Council, told the Daily Reporter that he still feels that way.

“They need to have that up there,” he said of the fire protection territory. “That’s been neglected for so long.”

He commended Florence May, who started as Vernon Township trustee in 2019, for her work on the undertaking.

The township is the fastest growing area in the county, Bolander noted.

“It’s just insane that they don’t have more fire protection than what they do,” he said. “They should have their own territory. Since they couldn’t get the special legislation, a territory is the next logical thing for them to do.”

Vernon Township is estimated to have a net assessed value of almost $656 million in 2021, Sansone said during the public hearing. Estimated expenses for the proposed fire territory come in at about $4.9 million. Subtracting other applicable revenue sources results in almost $4 million, which, divided by the township’s net assessed value, leaves a rate of $0.006061 per $100 of assessed value, or 0.6061.

There would also be a tax rate for an equipment replacement fund with its own maximum rate of $0.0333, in accordance with state law, Sansone said.

Indiana allows fire territories to build a 10% cash reserve in their first year, meaning Vernon Township’s tax rate would decrease in 2022 before increasing in the future by a statutory growth factor applicable to all taxing units in the state.

The second public hearing for the fire protection territory, like its first, will be held via the free teleconferencing software Zoom at 6 p.m. Wednesday, May 27. The meeting ID is 879 3134 2677, and the password is 012638. It remains to be determined whether the third and final public hearing at 6 p.m. Wednesday, June 17, will be virtual or in person.

After the hearings have been completed, the Vernon Township Board, Fortville Town Council and McCordsville Town Council will vote on whether to create the fire protection territory. All bodies would have to approve for it to come to fruition.

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Proposed Vernon Township fire protection territory

Estimated property tax increases, not factoring tax caps

  • Unincorporated Vernon Township: 24.1%
  • Fortville: 16.3%
  • McCordsville: 19.3%

Source: Baker Tilly Municipal Advisors

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WHAT: Public hearing for proposed Vernon Township fire protection territory

WHEN: 6 p.m. Wednesday, May 27

WHERE: Zoom

  • Meeting ID: 879 3134 2677
  • Password: 012638

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