Noble County residents — with the exception of Albion-area townships — will enjoy slightly lower tax rates in 2021 compared to last year.
Thank rapidly rising property values for the help, although that means anyone looking to buy homes or land better be socking away a little extra as prices keep shooting up.
This year, 17 of Noble County’s 22 tax districts have lower rates compared to 2020, which is likely good news for most taxpayers.
That doesn’t necessarily guarantee your tax bill will be lower — if your values rose by a larger percent than the decrease in your tax rate, you could owe the Noble County Treasurer a little more come May and November — but lower rates improve the chance that your amount owed will be a little less or, at least, not more than last year.
With the exception of Noble County government and Central Noble Community Schools, every other local government saw a decrease in tax rates compared to 2020.
Across the county, the drop in tax rates was driven less by reductions in government spending than it was by faster-rising property values.
Tax rates are calculated by taking the amount of taxes local governments need to raise to fund operations, the levy, and then dividing that by the total taxable value of the area that government serves.
Then, the tax rates from each overlapping government unit serving a particular property are added together to give a tax district rate. For example, Ligonier residents are served by Noble County, Perry Township, Ligonier city, West Noble Schools, and Ligonier Public Library, so all of those individual rates are added together to get the total rate.
The main reason why taxes were down across most of the county is that increases in property values outpaced increases in government spending.
Local governments were allowed by the state to increase their spending up to 4.2%, but the countywide assessed value rose quicker than that, increasing from $2.28 billion to $2.44 billion overall this year, a rise of 6.93%, which is unusually high.
Noble County Assessor Ben Castle said that’s not slowing down either, with current preliminary trending show values trending as much as 12% higher now in a sales market he called “unreal.”
“What we’re seeing countywide is about a 12% increase in the county through assessed value and it’s all sales driven,” Castle said.
The main driver behind assessing property is local sales. When a house or a piece of land sells, that value is reported to the assessor. Assessors then look at localized sales and adjust the value of other nearby parcels to reflect what similar properties in the area are actually selling for in the current market. Indiana uses market-based assessing, so values are supposed to reflect current market prices.
Right now, not just in Noble County but all over Indiana and nationally, there is a low inventory of housing and a high demand is causing prices to spike. It’s supply and demand 101.
Castle, who also sells real estate, says agents are continually struggling to maintain inventory as new listings sell so quickly with a lot of competition.
“The sales are just unreal,” Castle said. “There are six to eight buyers for one home which creates a bid war.”
If assessed values keep shooting upward, local taxpayers may expect to keep seeing lower rates. The state limits government spending growth based on an average of non-farm income in the state, which generally runs somewhere between 2-4% per year depending on how the economy is doing.
So if values continue to inflate at higher percentages than the state growth quotient, tax rates are likely to continue to come down.
Castle reminds taxpayers to check their assessments each year and, if they feel their home or land has been assessed at a rate higher than what it’s actually worth, he encourages them to file an appeal.
“I always want my taxpayers to know if you don’t think you can sell your house for that, then you need to come and talk to us,” Castle said, advising that it helps to have an appraisal to help make a case. “If there’s something wrong with your land, let us know so we can take a look.”
The sharp increases in assessed values across the county helped keep overall tax rates lower for most taxpayers, even with the county government rate, which is paid by all landowners in the county.
Noble County government was one of only two government units to have an increase in its tax rate, with the small rise brought on by the county borrowing to fund its new $15 million annex building in downtown Albion.
The overall price taxpayers are paying for that new bond, however, is small, with the county tax rate increasing by slightly less than 1.5 cents per $100 of assessed value, a change of 3.46%.
The 20-year bond the county is using to fund the annex project came in at a debt-service rate of 3.06 cents per $100, but drops in the tax rate via other funds meant the total county rate went up less overall.
The only other government unit that saw an increase in its tax rate this year was Central Noble, which increased 4.77%, an addition of about 3.3 cents per $100 of assessed value.
Central Noble’s rate was low last year at about 79.5 cents, so the increase to 82.8 cents per $100 is more in line with what the district had been seeing in previous years. Central Noble’s tax rate was 81.9 cents per $100 in 2019 and 82.3 cents per $100 in 2018.
Central Noble did have good property value growth of 4.7% across the district’s boundaries, but the increase was driven simply by bigger debt payments. The school district’s debt levy rose from $1.18 million in 2020 to $1.41 million this year, driving a tax rate increase of almost exactly 3.5 cents per $100.
The increase comes from Central Noble taking on some new borrowing in order to keep up on facility maintenance across its buildings.
“We did add $4 million in new debt to keep our roofs under warranty, upgrade lighting to LED, HVAC and plumbing upgrades, and some various building improvements,” Central Noble Business Manager Tyler Osenbaugh said of the change in the debt rate.
Most other government units saw their tax rates drop around 5% this year, although some had slightly bigger and some slightly smaller.
Avilla saw the biggest decrease in the county this year, with it’s tax rate dropping 13.88% from a year ago.
Avilla is the perfect example of what an exploding assessed value can do for a unit’s tax rate. The town’s spending increased by just 2.6% for the year, but its total assessed value rose from $85.3 million to $101.6 million, an increase of 19.1%.
East Noble had the county’s other unusually large tax rate drop, as the school saw an 8.28% decrease in its tax rate this year. The tax rate dropped to 78.7 cents per $100 of assessed value, the lowest mark in the last 10 years.
East Noble’s tax rate had hit as high as 98 cents in 2016, but has been slowly in decline since, despite building a new middle school.
The decrease is likely to be a one-year blip, however, as the district is currently in the process of borrowing for a $5 million upgrade to its Ohio Street bus garage.
East Noble is paying off debt on roof and HVAC repairs on two elementary schools, but narrowly missed a window to borrow for the bus garage project to create a seamless replacement of the old debt rolling off and new debt coming on.
That means the tax rate is down a little bit this year, but will likely rise about 2.5 cents next year as the new bus garage debt comes online, Chief Finance and Operations Officer Brian Leitch said.
That means East Noble taxpayers are likely to see a higher rate next year, although the district is keeping up with its promise that tax rates won’t rise higher than what they were before the East Noble Middle School was built, as the increase should put the school back to where it was approximately in 2020.
Wolcottville, West Noble schools, Smith-Green schools and all three library districts in the county saw rates decrease between 4-6%. Wolcottville’s tax rate has decreased for four straight years now, falling from $1.40 per $100 in 2017 to now just 88.9 cents.
Kendallville’s decrease was a little smaller at 2.68% this year and Albion and Rome City were each down by about 1.5%.
Rising values helped even give small decreases to west-side municipalities that had been on streaks of yearly small increases. Ligonier and Cromwell both had tax rates decrease by less than 1%, but that broke streaks of four-straight and three-straight years of tax rate increases for those communities, respectively.