Update: Reassessment a Disaster in Many Ways

December 4, 2005

Andrea Neal column for May 25 and thereafter
740 words

Note to editors: This updates May 25 column with Supreme Court decision for newspapers that publish column later in week.

INDIANAPOLIS — The reassessment fiasco continues. If Marion County’s experience didn’t convince lawmakers the system is messed up, Lake County’s surely will.

Even before tax bills went out, citizens living in Gary’s Miller Beach area filed suit, alleging the county’s property reassessment process was unconstitutional. On May 7, a lower court agreed and halted the mailing of bills. The Indiana Supreme Court said Thursday billing should move forward, but ordered oral arguments be held in the case on June 23.

When Gov. Joe Kernan visited the region recently, protesters — some of them facing 900 percent tax hikes — demanded he call a special session of the legislature. Others have been flooding the newspapers with angry mail.

"Many of the increases are absolutely outrageous," wrote Dan Powers of Crown Point in a letter to the editor in The Times of Northwest Indiana. "No Indiana resident should ever be in jeopardy of losing their home because of a gross lack of due diligence and planning over taxes."

Until the courts sort things out, funding of critical public services remains in jeopardy. Lake County relies more on property taxes than any other county. Some child welfare agencies had already taken out loans to make ends meet.

Lake County is going through now what Indianapolis residents endured a year ago, only worse. In some urban pockets of Indianapolis, residents faced tax increases in the 300 percent range. In some neighborhoods of East Chicago, Gary, Hammond and Whiting, the increases are two or three times that.

Lake is one of seven counties that have yet to mail out bills from the 2002 reassessment because of confusion over new assessment guidelines. The new rules were the result of a 1998 Indiana Supreme Court decision requiring Indiana to move toward a more uniform, market-based property assessment system.

Lake County’s beef, however, goes beyond rising tax bills.

In his May 7 ruling, Lake County Superior Court Judge Robert Pete said it was wrong for the legislature to single out Lake County in requiring that an independent assessor conduct the reassessment instead of elected assessors, who did the task in the other 91 counties. Although few will say it bluntly, lawmakers felt the Lake County officials weren’t competent to conduct what was certain to be a complicated and politically sensitive assessment that would shift the burden from the county’s four big industries toward homeowners.

Whether or not a special session is merited, it’s clear that the reassessment guidelines are not creating the fairer, more uniform system demanded by the Supreme Court.

Earlier this month, two Indianapolis lawmakers asked Attorney General Steve Carter to look at the constitutionality of the "neighborhood factor" used in the formula for assessing houses. The factor is multiplied by a home’s "bricks-and-sticks" value to reach something close to a market price.

The factor has led to wide disparities in assessments of houses that are physically comparable, but located in different neighborhoods, sometimes separated by only a street.

"In my district, I have homes that face each other," explained Rep. Cindy Noe, R-Indianapolis. "They are relatively the same house. They have relatively the same amount of area. Yet if you look at the neighborhood factor, one is way high and one is way low."

Noe and Rep. Carolene Mays, D-Indianapolis, have asked Carter to issue an advisory opinion on the subject; Noe says the issue may get placed on a slow track in light of the Lake County lawsuit.

During the 2004 Indiana General Assembly, lawmakers tweaked some property tax credits, but declined to address the assessment process itself because reassessment had not been completed across the state. It did, however, establish a study commission to evaluate the effects of reassessment and study ways to reduce state reliance on property taxes.

At a recent meeting of the commission, two groups trying to analyze the effects offered similar opinions: It’s almost impossible to do because data coming in from counties is incomplete or inconsistent. That’s no comfort to the folks in Lake County trying to figure out if they can keep their homes.

Even without data, it’s safe to declare reassessment a disaster. If the aim was a fair and uniform system of valuing property, Indiana has missed the target.

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