The Courtship of Landlords and City Government

Of course, the black widow cannibalizes her lover after the mating ritual is complete.

After all these years of upheaval, Governor Daniels proposed property tax legislation might force these reluctant participants together. Beyond the taunts of slum lord and corruption, is the steady undercurrent of money.

Back in the good old days when Wes Miller was cutting his teeth on Harrison Park, it was indeed a run-down, blighted area in need of redevelopment. Economic conditions weren't so good either, interest rates were at historical highs and property values were at much lower levels than they are currently. Taxes, were still based on the depreciation model.

Individuals with the capital to invest in such an environment, no doubt found the ability to make a profit. Nothing wrong with that, it's the American way. Local government didn't care much, they had heavy industry footing the bill. The advent of the "cut-up", however, was not a positive addition to the housing stock of Hammond.

The onset of reassessment, has changed the landscape dramatically. Not only has the tax burden been shifted from big business to the residential property owner, but interest rates have dropped to generational lows. At the same time property values have skyrocketed, North Lake County Indiana being one of the exceptions. Local government, cares very much about where it's revenue stream is being generated now days.

Governor Daniels 1-2-3% property tax proposal is a god-send for residential and small rental unit property owners. For local government, it's a disaster waiting in the wings. Reducing homeowners property taxes to 1% is a 50% savings for that group. For rental property owners, who are paying approximately 5% of the value of their property, going down to 2% is a 60% savings on their tax bills. Even with the proposed savings from the state taking over welfare payments and opportunity for further savings on the expense side, the loss of revenue for the city will be devastating.

True, a resolution of the property tax mess will release some "latent" price appreciation in Hammond property values, and quite possibly will generate an increase in business interest in locating in Hammond. These would be positive developments, no doubt, but in the immediate aftermath of property tax realignment, they would not provide enough boost to make up the difference.

It is obvious that an alternative source of revenue will be required in conjunction with property tax relief. Something to talk about?