A former head of the Indiana Department of Local Government Finance says some Marion County homeowners soon could see property-tax increases of as much as 50 percent—far higher than government officials previously estimated.
In part, that’s because of Indiana’s decision five years ago to abolish the inventory tax across the state. While some counties already have phased it out, Marion County didn’t eliminate it until this year—shifting what had been a huge tab shouldered by businesses onto homeowners.
Residential taxpayers also are poised to take a hit as assessors update property-tax values for the first time since 2003, when the state first tried to set assessments based on actual market values. Homeowners are expected to receive their bills in about a month.
“What’s distressing is we don’t know what is going to happen in Marion County,” said Beth Henkel, who served as commissioner of the Department of Local Government Finance from 2003 to 2005. “Property tax is not rocket science, but I wish it were. We’d slow down and not make so many changes.”
Henkel, now a tax consultant with the Indianapolis-based law firm Schuckit & Associates PC, expects a concentration of problems in Marion County because it has more older neighborhoods, where properties are harder to assess. Some older properties haven’t changed hands in decades. As a result, hard data on their true market value is unavailable.
Indiana has long struggled to move to a market-based property-value system. The old method updated property values just once every 10 years. Assessors hope to eventually make it an annual event.
The first go-around at reassessment, four years ago, touched off a political tempest. Assessors tagged property values—particularly for many older homes in historic neighborhoods—with market values far exceeding what owners anticipated. Retirees complained that the higher tax bills were pushing them toward insolvency.
Property-tax experts like Henkel see the same dark clouds looming again.
Anticipated problems with the marketvalue-adjustment process, known colloquially by assessors as “trending,” already have startled state elected officials into action.
When the Legislative Services Agency reported this spring that trending might spur a 24-percent average increase in residential tax bills statewide, the General Assembly raced to blunt the impact, ultimately approving a plan to provide $550 million in rebates.
Lawmakers came up with the money by authorizing a total of 4,000 slot machines at the state’s horse tracks in Anderson and Shelbyville. Most lawmakers went home from the Statehouse satisfied that they’d averted property-tax disaster, believing the rebates would offset most of the tax hike.
But not so fast, Henkel warns. She thinks that trending, the elimination of the inventory tax and several other technical factors suggest that a number of Marion County homeowners still will see brutal tax increases. Even factoring in the rebates, she said the hikes could reach 50 percent for some homes.
I appreciate Marion Co. Assessor Greg Bowes' candor in the story about one of the causes of the rising property taxes. He surprisingly points the blame at the appropriators. The IBJ writes:
Marion County Assessor Greg Bowes pointed out that higher assessments aren’t the only cause of increases in property-tax bills. Just as important is the amount of spending that local governments approve.
If local officials can keep their costs in check, Bowes said, there’s less need to increase property-tax payers’ bills. “It’s not the assessment process that’s the source of your burden. It’s the increase in the appropriations,” Bowes said.
“If you want to change the property-tax process, your recourse is voting for legislators and councilors.”
12 comments:
I built a new house in Pike in 1999. After the first assessment my taxes went up 200 per month. After my second assesment it went up another 200 per month. God knows how much it will go up again !
Well, your first problem was building new in Pike, but I digress...their school system is drunken sailors with tax dollars, and frankly, you haven't been getting your money's worth for about 25 years from that system. And no hope in sight.
It is not the legislature's job to assess property taxes, so it isn't their job to "relieve" us of the property tax budren.
It's their job to establish a stautory system for assessment of property taxes. They're frankly not bright enough to do much else, so I'd appreciate it if they'd quit medlding. It only masques the problem--big spending.
We need to direct the ire at the decision makers: school boards, city council, multiple autunomous local towns, stupid and duplitictous township government, library board,--who appropriate these taxes.
Assessors merely calculate and send those results to the treasurer, who applies the approved budgets to the assessment work.
Until we spend less, we'll have to raise more. Simple math.
It is somewhat complicated, given the legislature has been messing around the edges since Gov. Bowen's ridiculous 1973 tax package. That legislative slight-of-hand doubled the sales tax, and gave some of those proceeds back to local governments as "Property Tax Relief." It's a sugar teat which this gutless legislature hasn't had the courage to shake since.
I'm so sick of units of government dodging their responsiblities, and trying to fix problems that aren't theirs.
Over decades, it leads to chaos, which is what we have now. And, more often tha tnot, no lower taxes, and less govt. services.
We need the legal equivalent of an "all clear" from this situation:
Legislators: stop quick fixes which only encourage the habit.
Local units of government: Spend less. Eliminate township government. (Yeah, Wilson, it isn't much, but it's stupid and wasteful)
Citizens: Demand that every level of government do its job, and ONLY its job. Don't hold legislators accountable for property tax increases.
And I promise I won't hold legislators acocuntable for poor city streets.
Gotta run...I need to yell at my butcher for my clogged sink. Somehow I'm sure he's responsible.
Ignore Wilson.
Who would have guessed Wilson could be both euphonious and alliterative in the same post.
Bravo.
I appealed last time and prevailed in a older north side home. Brick, slate roof, etc. Got both the neighborhood factor and the quality factor reduced. Lots of errors in the Washington Township assessor records regarding homes in our neighborhood.
These discussions give far too little focus to school spending. People seem to realize that schools take up about half our property tax bills, and yet, the property tax complaints continue to focus on the Council, the library board and others who definitely deserve some blame, but less so than the schools.
Wake up people. IPS now spends over $14,000 per student per year. The townships are all over $10,000 per student per year. And all of them - every single one - is planning to spend more through additional bonding.
Meanwhile, nobody played a greater hand in derailing genuine property tax reform than the combined efforts of the ISTA teachers union and the various administrator groups/lobbyists who represent your local superintendents, principals and school board members.
Generally, government gives us what we deserve. And as long as we continue to ignore the real elephants in this room, then we will get more and more of the crap that we have been getting.
So get out those checkbooks, folks. Or maybe, just maybe, you ought to spend more time talking about schools.
What a novel idea. Elliminate the need for services in Indiana by forcing the residents to leave, thus decreasing the need for future tax dollars and returning the land to the now profitable business of corn production.
Thanks again Gary.
It is time to demand audits of government. If we are spending $10k to $14k per student, why aren't they getting the equivalent of a private school education for that money? That is more money than I paid to go to college.
With our county income tax likely doubling later this year too, the taxpayer is looking at a double whammy.
Local city government needs to undergo a complete audit too. Perhaps we could give merit increases to city councillors to get this done for the taxpayers. They could be paid a percentage based on tracking down where all the government waste is.
I'm sick of footing the bill for government incompetence.
P.s. It's hilarious how you have to audit Wilson.
I don't feel badly about paying property taxes, I just want the assesors to do their jobs and not be lazy. I went down to the Franklin Township assesors office and had them explain the re-assesment to me. It just depends on which assesor you got for your neighborhood. All neighborhoods are assesed by the average home sales over a period of the last two years. Some neighborhoods are divided into 1 story under and over 1400 sq and then 2 story. My neighborhood is just divided into 1 and 2 story houses. My home is 1200 sq with a small yard setting between larger 1500 sq homes with fireplaces and out buildings and larger yards. SO my lazy assesor just lumped all the 1 story homes together and averaged the sales. That gives me grounds for an appeal but come on guys do your jobs
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