Some Clay County residents will be receiving an additional reduction in their tax bills.
Last week, the Indiana Department of Local Government Finance (DLGF) announced the certified 2007 Homestead Refund Percentage Rates by taxing district and total amounts to be sent to each county.
The rates were calculated by a formula based, in part, on how many homeowners were eligible for the exemption.
"In order to qualify for the Homestead Credit, a person must own or have a substantial interest in the property, own the home itself and have the home be their primary residence," Clay County Auditor Mary Jo Alumbaugh said. "Also, this credit is not automatically given, the individual must apply for the credit."
The state is distributing a total of $300 million in tax rebates to the 92 counties, and Clay County will be receiving $878,307 of the total amount.
The rebates are in addition to the amount of credit already on the current tax bills.
"Some residents will be receiving a little more back," Alumbaugh said. "We have until Dec. 20 to calculate the rebate for those who qualified for the credit. However, we have to collect all the taxes first and have the settlement of the taxes approved by the state before we can start the calculations."
On average, the Homestead Credit Refund percentage is 1.2651 percent higher than calculated on the tax bills sent out earlier this year.
"According to the DLGF, the general rule of thumb is that the rebate will be 5-10 percent higher than on their tax bill," Alumbaugh said. "The state average credit is about $240, so with the additional credit, the rebate would range from about $252-$264."
One problem many counties, including Clay County, will run into is the expense of mailing out the refunds.
"For the software to calculate the refund, postage, envelopes and the 8,000 checks we will have to send out, the county will have to spend approximately $9,486," Alumbaugh said. "This is an expense the county itself will have to eat."
The state said counties may earn interest on the funds they receive until the rebate checks are mailed, but Alumbaugh said the cost to the county will not be completely covered.
"Even with the funds earning interest for the 45 days from the day we receive it until the Dec. 20 deadline, the county will still need to cover about $4,162 of the total mailing costs," she said. "This is a good thing for the residents, but when things like this happen it creates an added unexpected cost to the tight-budgeted counties."