Election Day is coming up, and 12 Indiana school districts have put property tax referendums on the ballot. Voters who own homes will want to know, “How much will I pay if the referendum passes?”
Here’s how to make a good guess. You’ll need two bits of information: the value of your house, and the referendum tax rate. Most homeowners have an idea of what homes like theirs sell for. You could use that number, or you could look at the springtime assessment mailing from the county assessor. It shows the assessed value of your home for taxes in the following year. That’s the number you need.
The referendum tax rate is probably quoted in the news about the coming election. Or you can look for the rate on the Department of Local Government Finance’s website, at in.gov/dlgf. Click on “Referendum Information.”
Now divide the home value by 2 and multiply by the rate. Remember that the rate has a decimal point out front. Divide the result by 100. That is more or less the amount you’ll pay to the school district if the referendum passes.
Here’s an example to show why this works. Let’s use the West Lafayette School Corporation’s referendum renewal of 37 cents, because the Tippecanoe County auditor provides the data we need in the Auditor’s Certificate (see the DLGF website again). Also, that’s where I live.
Start with the gross assessed value of a homestead. That’s an owner-occupied primary residence, and the auditor says the average value in West Lafayette is $284,400. All homestead owners get deductions subtracted from the gross assessed value to get net or taxable assessed value. First is the $48,000 standard deduction. Subtract it from the gross assessment, and the remainder is $236,400. Second is the supplemental deduction, which in 2024 is 40 percent of the remainder, which is $94,560. Subtract that and the result is taxable assessed value, $141,840.
That’s just about half of $284,400, which is why dividing the value by 2 works. If the home value is lower, dividing by 2 gives a number a bit too big; if higher, dividing gives a number a bit too small. But you’ll be in the ballpark.
The proposed tax rate is $0.37 per $100 assessed value. Multiply by $141,840 and divide by 100, and it’s $525. If the referendum passes, that’s how much the owner of the average home will pay.
But the ballot questions don’t show a dollar amount. Instead, West Lafayette’s ballot question says the referendum would “increase the average property tax paid to the school corporation per year on a residence within the school corporation by 46.2 percent.” Could a homeowner use this 46.2 percent to calculate $525?
The total tax rate for the West Lafayette School Corporation is $1.2555 per $100 assessed value. You can find your school district tax rate in Table 3 of the tax bill mailing you receive each spring. Here, subtract the 37 cents since the referendum rate is already in effect. Don’t subtract if your referendum rate is new. Subtracting gives $0.8855. Multiply this number by the taxable value, $141,840, to get $1,256. That’s the school district gross tax bill, without the referendum.
Tippecanoe County has a local income tax credit for property tax relief, which subtracts 9.48% from the gross tax bill. That percentage isn’t listed in the tax bill mailing, though it can be calculated from line 4a of Table 1. A 9.48% credit on the school tax bill is $119, which leaves $1,137.
Multiply $1,137 by the ballot percentage of 46.2 percent and you get $525, the right answer. It’s how much the average homeowner pays to West Lafayette schools for the referendum tax rate.
Your amount will differ depending on your home value and your school district’s proposed tax rate. Be careful, though. In West Lafayette and many other districts, the referendum continues an existing rate. The average homeowner won’t pay $525 more than they pay now if it passes. They’ll just keep paying that amount. They’ll pay $525 less if the referendum fails.
You will not be able to make this calculation on the fly in the voting booth! So figure how the referendum will affect your tax bill before you vote.
