Study: Local Governments Have Less Revenue Than 2007 Thanks To Property Tax Caps

Local governments across Indiana are taking in less revenue than they did before 2007.

That’s according to a new study from Indiana University’s O’Neil School of Public and Environmental Affairs. The study says the decline in revenue is a direct result of property tax caps championed by former Gov. Mitch Daniels.

Property taxes are the primary source of revenue for local governments but the caps limit the amount of money they can receive.

Professor Justin Ross is one of the study’s authors. He says the full impact of the policy is just now being felt.  Ross says local governments in other states are seeing their revenues increase, while Indiana’s remained flat.

“Every other state has largely rebounded from the Great Recession in terms of their local government,” he says. “Indiana has not because of the property tax caps.”

The study was commissioned by the Indiana Fiscal Policy Institute, a nonprofit that researches the effects of tax policy in the state.