Indiana Assessors Defy the Tax Court

April 7, 2023

“Now is the time when men work quietly in the fields and women weep softly in the kitchen; the legislature is in session and no man’s property is safe.” — Daniel Webster (1782-1852)

by Craig Ladwig and Ken Davidson

The president of the Indiana County Assessors Association (ICAA), a Republican incidentally, is leading a statewide effort to make private property arbitrary or at least a matter of legislative or administrative whim. You would have to go back to when Shakespeare was writing sonnets to find anybody of stature who thought that was a good idea.

Nonetheless, her association wants to make it so. The details, wrapped up in legal challenges and Statehouse politics, are purposely obscure and she has not responded to our request for clarification. 

Until we hear from her we, can offer you this: 1) the ICAA appeared to support a work-around for the 2008 cap on property taxes that skirted the law; 2) it got caught; and 3) it has hired lobbyists and attorneys to sweep it under the rug with a legislative fix. This is all to the distortion of the tax code that us hapless fools must live under.

The ICAA president, presumably an expert on property matters, doesn’t appear to see anything wrong with defining real property as if turning a dial. Yes, you can visit countries that run their economies that way but you wouldn’t want to stay long.

In the case of Schiffler vs. Marion County, her association agreed with the respondent, the Marion County Assessor, that under Indiana Code the application of the standard homestead deduction applies to just “one house, one garage and one acre of land.”

The Indiana Tax Court rejected that, pulling out its trusty Webster Dictionary to explain that “include,” as it applies in current state law to the most favorable tax application, means that additional and multiple out-buildings on a “homestead” are part of the “dwelling” and also qualify for the full deduction. Here is the Court’s analysis:

“Contrary to the position advocated by the assessor, the term ‘dwelling’ is not defined as ‘just one’ house and garage. Instead, a ‘dwelling’ is defined as the ‘residential real property improvements that an individual uses as [his] residence, including a house or garage.’ That plain language places no limitations on the number of improvements that can qualify as a ‘dwelling’; rather, it hinges an improvement’s eligibility for the standard homestead deduction as a ‘dwelling’ based on how the individual uses it (for a permanent rather than temporary home). Moreover, through its use of the phrase ‘including a house or garage’ the plain language of the statute indicates that a dwelling can consist of improvements that are not a house or garage.”

Consequently, the respondent received a refund for overpayment of taxes, as should tens of thousands of other hoosiers who have “appurtenant structures” (sheds, pole barns, pools, pergolas or other things). But lobbyists for the Indiana Association of Counties and the Indiana Assessor Council are attempting to push legislation that would negate the Court’s decision and deny the refunds.

To make matters worse, every assessor in Indiana last week was told by one expert or another to prepare tax bills as if the Court had never met, applying the maximum 3 percent rate to secondary structures. Uncertainty reigned. Numerous appeals were put on hold on the promise that pertinent legislation would pass and apply retroactively. Moreover, the assessors association hinted at defiance until its lobbyists could get the the law changed. Here is the ICAA president in an email to her membership shortly after the Schiffler ruling:

“While I cannot tell you what is best for your county, I am personally going to hold off on making changes to my data (regarding the court decision) at this point in hopes that we can establish parameters.”

As it stands, the Senate version has been amended to soften the impact but the medieval mindset remains — that is, the state can do what it wants with your property but you must ask permission for any relief.

There are two problems with all of this. The first is the willingness of elected officials to work not only against the interests of their constituents but against constitutional principles. The second is that it ignores that property, unlike pronouns, is an absolute. You cannot “sort of” own property. It has been that way since Magna Carta. The assessors, though, as if the collectors of a medieval geld, would like the government (they/them/it) to redefine property as they/them/it see fit.

The assessors indicated in Shifflier that their authority came not from any silly old constitution or law but from a “fact sheet” published by the Indiana Department of Local Government Finance. Indeed, their association, in its various legal arguments, didn’t seem that impressed with the Indiana Constitution and its protection of property rights. And their motive for passing over plain-language definitions in current statutes for legalese was obvious: That’s what would have saved them from having to refund the tax money.

Why state legislators would consider throwing in with such a specious argument is another matter. It might be that the machinations are so complicated that they don’t understand what’s at stake. Most likely, they reflexively like the idea of having more control over our property. Certainly, the assurance that a lazy media will not finger them for raising taxes has a lot to do with it. 

To summarize, Shifflier marks a line in our relationship with government. It is where an elected official quits working for citizens and begins working for purely statist interests. And to be clear, the issue is not the excessive taxation, which may be small in the grande scheme of things. Again, it is the acceptance that property is defined by what assessors and legislators determine will bring in the most money.

If that is the direction we are headed, even with a Republican supermajority and the most local officials, Indiana will not prosper.

Craig Ladwig is editor of the quarterly Indiana Policy Review, a publication focused on state and local issues. Ken Davidson is publisher of the Northwest Indiana Gazette, an occasional news sheet challenging the transparency of Indiana public policy.


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