Indiana Closes Fiscal Year with $2 Billion Surplus; Taxpayers to Receive Refund

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From the Indianapolis Business Journal:

Indiana Gov. Mitch Daniels is touting state cash reserves he says will send an additional $100 to each Indiana taxpayer through automatic tax credits next year.

Daniels said Tuesday he expects the state to close its books for the fiscal year with $2 billion in cash reserves. Roughly $300 million would go to 2013's tax credits and another $300 million would go toward the state's unfunded teacher pension liability.

Final numbers won't be available for at least another week as state budget leaders continue wrapping up the fiscal year that ended Saturday.

The cash reserves have come from a mix of three major factors — improved tax collections, spending cuts to state agencies and an error in which the Daniels administration discovered $320 million in untouched tax collections.

http://www.ibj.com/daniels-touts-tax-credit-from--2b-indiana-surplus/PARAMS/article/35339

DLGF Publishes Memorandum on Procedures for Establishment of Cumulative Funds

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MEMORANDUM

TO: All Political Subdivisions
FROM: Dan Jones, Assistant Director, Budget Division
SUBJECT: Procedures for the Establishment of Cumulative Funds
DATE: July 3, 2012
INTRODUCTION
The Department of Local Government Finance (“Department”) issues this bulletin, which applies to the following Cumulative Funds established under Indiana Code § 6-1.1-41. This bulletin is effective July 1, 2012 and supersedes all previous bulletins.
See the full memorandum here:
http://www.in.gov/dlgf/files/120703_-_Jones_Memo_-_Establishment_of_Cumulative_Funds.pdf

DLGF Publishes Memorandum on TIF and Redevelopment Commission Responsibilities

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MEMORANDUM
TO: County Auditors
FROM: Dan Jones, Assistant Director, Budget Division
SUBJECT: TIF and Redevelopment Commission Responsibilities
DATE: July 3, 2012
This memorandum provides guidance to county auditors regarding the statutory responsibility of redevelopment commissions in determining and reporting the amount of excess or shortfall of assessed values within Tax Increment Finance (“TIF”) districts before July 15 of each year. (IC 36-7-14-39(b)(3)).
The Department of Local Government Finance (“DLGF”) recommends that each county auditor contact his or her county’s redevelopment commissions to notify them of this responsibility. The DLGF recommends that each redevelopment commission submit the written notice to its county auditor prior to certification of the 2012 pay 2013 assessed valuations to the DLGF. Statutorily, county auditors are to certify 2012 pay 2013 assessed values by August 1, 2012. (IC 6-1.1-17-1).
County auditors should forward a copy of each redevelopment commission’s written notice to the DLGF’s Budget Division at the same time that the Certificate of Net Assessed Valuations is filed.
Reporting the excess assessed value is especially important when a referendum has been approved by a unit or school within the TIF allocation area or the unit anticipates adopting a Tax Increment Replacement rate (“TIR”) in the 2013 budget when the unit has a shortfall in the required assessed value.
The redevelopment commission must submit a written notice including:
1) The amount, if any, of excess assessed value that the commission has determined may be allocated to the respective taxing units; or
2) A statement that the commission has determined that there is no excess assessed value that may be allocated to the respective taxing units.
The manner for determining the excess assessed value is prescribed in IC 36-7-14-39(b)(3) as follows:
(A) Determine the amount, if any, by which the assessed value of the taxable property in the allocation area for the most recent assessment date minus the base assessed value, when multiplied by the estimated tax rate of the allocation area, will exceed the amount of assessed value needed to produce the property taxes necessary to make, when due, principal and interest payments on bonds described in subdivision (3) plus the amount necessary for other purposes described in subdivision (3).
(B) Provide a written notice to the county auditor, the fiscal body of the county or municipality that established the department of redevelopment, and the officers who are authorized to fix budgets, tax rates, and tax levies under IC 6-1.1-17-5 for each of the other taxing units that is wholly or partly located within the allocation area. The notice must:
(i) state the amount, if any, of excess assessed value that the commission has determined may be allocated to the respective taxing units in the manner prescribed in subdivision (1); or
(ii) state that the commission has determined that there is no excess assessed value that may be allocated to the respective taxing units in the manner prescribed in subdivision (1).
The county auditor shall allocate to the respective taxing units the amount, if any, of excess assessed value determined by the commission. The commission may not authorize an allocation of assessed value to the respective taxing units under this subdivision if to do so would endanger the interests of the holders of bonds described in subdivision (3) or lessors under section 25.3 of this chapter.”
The requirements and procedures for adopting a TIR are prescribed in IC 6-1.1-21.2-12. 

DLGF Publishes Memorandum on Changes to Cumulative Fund Establishment

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MEMORANDUM
TO: All Political Subdivisions

FROM: Brian E. Bailey, Commissioner
RE: Changes to Cumulative Fund Establishment
DATE: July 3, 2012
On March 19, 2012, Governor Mitch Daniels signed into law House Enrolled Act 1072 (“HEA 1072”), which modifies the process by which a political subdivision establishes a cumulative fund or modifies a cumulative fund tax rate.
Section 42 of HEA 1072 repeals IC 6-1.1-41-5, which had required the Department of Local Government Finance (“Department”) to require that a Notice of Submission be given to taxpayers when a political subdivision presented a proposal to the Department to establish a cumulative fund or modify a cumulative fund tax rate.

Now a political subdivision must, pursuant to IC 6-1.1-41-3 as amended by Section 41 of HEA 1072, publish a Notice of Adoption in accordance with IC 5-3-1-2(i) in a manner prescribed by the Department if the political subdivision adopts a proposal to establish a cumulative fund or modify a cumulative fund tax rate under IC 6-1.1-41-3.
These changes are effective July 1, 2012.
http://www.in.gov/dlgf/files/120703_-_Bailey_Memo_-_Cum_Fund_Notices.pdf

DLGF Publishes Memorandum on Allocation of Tax Revenue Subject to "Circuit Breaker" Credits

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MEMORANDUM
TO: All Political Subdivisions
FROM: Brian E. Bailey, Commissioner
RE: Allocation of Tax Revenue Subject to “Circuit Breaker” Credits
DATE: June 29, 2012
On March 19, 2012, Governor Mitch Daniels signed into law House Enrolled Act 1072 (“HEA 1072”), which addresses the way in which tax revenue subject to reduction by property tax credits under IC 6-1.1-20.6 (the “circuit breakers”) is to be allocated.
Section 35 of HEA 1072, effective July 1, 2012, introduces two new terms to IC 6-1.1-20.6-9.8: “protected taxes” and “unprotected taxes.”
The term “protected taxes” means the following:
(A) Property taxes that are exempted from the application of a “circuit breaker” credit granted under IC 6-1.1-20.6-7(b) or 7(c), IC 6-1.1-20.6-7.5(b) or 7.5(c), or another law.
(B) Property taxes imposed by a political subdivision to pay for its debt service obligations[1] that are not exempted from the application of a “circuit breaker” credit granted under IC 6-1.1-20.6-7(b) or 7(c), IC 6-1.1-20.6-7.5(b) or 7.5(c), or another law (such property taxes are subject to the credit granted under IC 6-1.1-20.6-7(b) or 7(c) or IC 6-1.1-20.6-7.5(b) or 7.5(c) regardless of their designation as protected taxes).
The term “unprotected taxes” refers to property taxes that are not protected taxes.
The total amount collected from protected taxes must be allocated to the fund for which the protected taxes were imposed as if no credit were granted under IC 6-1.1-20.6-7 or IC 6-1.1-20.6-7.5. The total amount of the loss in revenue resulting from the granting of credits under IC 6-1.1-20.6-7 or IC 6-1.1-20.6-7.5 must reduce only the amount of unprotected property taxes distributed to a fund in proportion to the unprotected rate tax imposed for that fund relative to the total of all unprotected tax rates imposed by the taxing unit. http://www.in.gov/dlgf/files/120703_-_Bailey_Memo_-_Protected_and_Unprotected_Taxes.pdf

Just another weekend? Not if you take advantage of a great project you can easily pull off for under $300

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Improve your home with a weekend DIY project you can easily pull off for under $300.

Install Window Awnings

Project #2: Install a window awning

The setup: Summer is super, but too much sunlight from south- and west-facing windows can heat up your interiors and make your AC work overtime. Beat that heat and save energy by using an awning to stop harsh sunlight before it enters your house.

Specs and cost: Residential awnings come in many sizes and colors.   Some are plastic or aluminum, but most are made with weatherproof fabrics.   They’re engineered for wind resistance, and some are retractable.   A 4-foot-wide awning with a 2.5-foot projection is $150-$250.

Tools: Cordless drill/driver; adjustable wrench; tape measure; level.   You can install an awning on any siding surface, but you’ll need a hammer drill to drill holes in brick.   To prevent leaks, fill any drilled holes with silicone sealant before you install screws and bolts.

Time: 3-4 hours

Source: By: John Riha
Published: May 24, 2012
Featured Single Family Homes

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Real Estate News: Do We Need Freddie Mac and Fannie Mae?

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Do we need Freddie and Fannie?

There’s a flicker of hope despite the nightmarish poverty and unemployment numbers released in the past week.   Signaling that the government is indeed concerned about the housing market situation, top Senate lawmakers started debating housing finance reforms at a Congressional panel.   Among the issues taken up were whether to wind down government backed entities Fannie Mae and Freddie Mac.   Many people following the housing market have wondered, why do we need Freddie Mac and Fannie Mae at this stage in the game?   According to Reuters, lawmakers on both sides of the aisle agree that the two entities should be “wound down,” but senators can’t decide where the government should have a role in doling out housing finance subsidies.

Senate Banking Committee Chairman Tim Johnson, D-South Dakota, was quoted in Reuters saying he is concerned about consequences that might happen if the government completely washes off its hands.   He said that historic low mortgage rates, now around 4 percent, would likely inch upwards.   Peter Wallison, an American Enterprise Institute fellow, argued in favor of a private system to enable investors.   Right now, taxpayers are forced to take the risks the government is taking, he said.

It will be interesting to see how this debate shakes out.   According to Reuters, the first test will come at the month’s end when the conforming loan limit draws back to pre-financial crisis levels.   Lawmakers were warned by industry experts against reducing the size of government-backed mortgages.   According to a Wall Street Journal story, without lawmakers’ intervention the maximum number of loans backed by Fannie Mae and Freddie Mac would drop Oct.1.   The paper reported that Democrats representing pricey coastal areas and real estate lobbyists are advocating to block the change, but they have failed to make any headway.   Only a handful Republicans are in their corner, the others want to reduce the mortgage market’s dependency on the government, the paper reported.   For potential homeowners, this would be a good one to follow.   At a time when lending has come under strict scrutiny, it's easier to get the government-backed mortgages than seeking your luck with a private lending agency.

Mortgages are Hard to Get

Buying a house is not as easy as it was a few years ago.   And you may be in for a lot of heartburn when you shop for a loan.   According to a USA Today story, tight lending standards have become a nightmare for consumers trying to get a loan.   The paper reported that home lending standards are at its strictest in decades, making it a struggle for consumers.   Current homeowners also share the pain while looking for refinancing because of dwindling equity in their homes.   The only mantra to get a quick loan these days seems to be enough savings for a hefty down payment and stellar credit scores.   USA Today says these days, despite near-perfect credit scores, consumers "face more demands to prove their incomes, verify assets, show steady employment and explain things such as new credit cards and small bank account deposits.”   And despite the mountain of paperwork, you may still not qualify for the sweetest deal around.   It’s a vicious cycle.   On the one hand, lenders want to make sure that consumers are absolutely able to meet their financial commitments thereby cutting down on foreclosures and arresting falling home prices.   On the other hand, the stringent rules are discouraging customers who have the means and perhaps hurting the industry’s recovery.

Orlando Bucks National Trend

Now for some good news.   Home prices in Disney’s home, Orlando, jumped 15.1 percent in the last year, according to Propertywire.com.   This at a time when Florida, along with California and Arizona, has been declared the worst hit by the housing crisis.   Orlando is a favorite destination for Europeans and folks from other parts of the world.   And they could have a major role in those numbers.   What’s also comforting for the market is that home prices have increased 21.2 percent since January last year.   So, if you are looking to invest, this market may not be a bad one to keep an eye on.

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