July 2007 No. 30Table of ContentsSpecial Issue - Property Tax |
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For Marion County, it’s clear—no property tax hike for 2007, yet. Basing his decision on a Dept. of Local Government Finance (DLGF) analysis of their property assessments, Governor Daniels said capitol-county home-owners should pay the same tax they did in 2006—still on time.
Average increases in property tax bills ranged from 15% to 67% across Marion County townships. The DLGF review also found it “particularly suspicious” that com-mercial and industrial assessments had hardly budged in 6 years. The bottom line—the assessments were “inaccurate or inequitable.” Daniels will use a private firm to do the business assessments.
Skyrocketing 2007 property tax bills are not just a Marion County problem. Daniels’ announcement indicated that only 18 counties had sent in complete property tax data. Elkhart, Delaware, and Jefferson counties were being “closely examined.” Gibson County is also suspect.
The gigantic jumps in property taxes are one of the hottest political issues in a long time. There’s plenty of finger-pointing going on. At first, the Governor said a bi-partisan agreement on a resolution to the controversy would be required before he called a special legislative session. That’s not for sure now.
In the midst of sky-rocketing increases in assessments, it’s difficult for many homeowners to remember that property taxes weren’t always based on “market values.” Courts changed that a few years back in response to circumstances in Lake County. In effect, Hoosiers paid sub-par property taxes for decades. But nobody complained about that. It’s the current increases that are incensing people, many of whom probably thought that any property tax was too much property tax.
Executive Actions. In addition to the Marion County tax freeze, the Governor took these steps:
Daniels also created a Blue-Ribbon Commission on Local Government Reform, co-chaired by his 2004 gubernatorial opponent, former Governor Joe Kernan, and IN Supreme Court Chief Justice Randall Shepard. The group is to come up with major reform proposals to restructure local government, make it more efficient, effective, and less costly to taxpayers—before 2008.
Today, some 2,730 local units of IN government can levy property taxes. “Only 9 states in the country have more,” the Commission’s charter said. It takes 10,746 officials to run them, and 1,100 are property assessors. IN is 39th among states in the number of counties, 37th in library districts, and 32nd in school districts. Thirty-one states have no townships, and of those that do, only 8 have more than IN.
School taxes make up 54% of all local levies followed by counties (19%), city/town (16%), special units (5%), libraries (3%), and townships (3%). Here’s the statewide breakdown on local government tax levies that more than tripled from 1984 to 2005.
| Unit of Government | 1984 |
2005 |
Growth |
| Library | $58.6M |
$245.9M |
347% |
| Schools | $1.1B |
$4B |
370% |
| County | $389M |
$1.35B |
346% |
| Township | $63.8M |
$219.8M |
348% |
| City/Town | $360M |
$1.18B |
327% |
| Special Units | $174M |
$398M |
227% |
| Total | $2.129B |
$7.389B |
347% |
The Commission’s members have not yet been chosen. It will be staffed by IUPUI’s Center for Urban Policy and the Environment. For the details and charge to the group, see www.in.gov/gov/gov_newsroom.htm.
Other Questions. Though the Governor’s order removed one of their objections, a rescheduled lawsuit filed by Marion County taxpayers will be heard August 7. It deals with refunds of now-higher 2007 taxes already paid before Daniel’s edict.
Prior to July 18th, a Marion City-County Council committee also had delayed a decision on approving Mayor Peterson’s plan to beef up fire, police, and jail services as well as put $450M into the city’s debt service on public safety pensions. He wanted a $90M-producing hike of the county income tax from 1% to 1.65%. Now, that’s up in the air.
The state also needs to invest in a multi-million dollar upgrade of its assessment forecasting system that the Indianapolis Business Journal says is a “patchwork of property tax software” that makes “predicting the result of tax policy decisions next to impossible.” Thus, today’s problem, “garbage in, garbage out.” The DLGF wants the upgrade. So does the IN Fiscal Policy Institute and the IN Assn of Realtors. Marion and several other counties are contracting for “a new, fully integrated” tax system, but it won’t be ready until 2009.
Other Options. While Indy Mayor Peterson and the IN Chamber of Commerce support the Governor’s initiatives, partisan debate will probably continue through the 2008 elections. According to the Indianapolis Star, in addition to the change to “market value” assessments, 2007 property taxes escalated because:
Some others complications also emerged:
Where From Here? During the early weeks of July before Daniel’s decree, a dozen or more ideas were floated to defuse the property tax issue, some more promising of bi-partisan support than others.
By July 18th, half of property tax notices hadn’t yet been mailed across IN. For those who are still not happy with their property tax options, you can file an appeal to the county assessor within 45 days—in Marion County’s case that’s September 10—for what that’s worth. Stay tuned!
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