From the Evansville Courier & Press:
Vanderburgh County government entities will get about $6.6 million due to a state error in calculating income tax revenue since January 2011.
...
The $6.6 million in county-option income tax, or COIT, revenue will be split between Vanderburgh County, Evansville, Darmstadt, township governments, the library, the Levy Authority and the Airport Authority, but not the Evansville Vanderburgh School Corp., Gries said.
"I'll be getting with an official from the Department of Local Government and Finance next week to get detailed instructions on how it is to be distributed," Gries said.
Vanderburgh County Council President Tom Shetler, Jr. said state officials told him about 45 percent, about $3 million, will go into the county budget.
"That's great news," said Shetler, who has reminded government officials for weeks about the anticipated $1-million shortfall this year.
"That means we have a lot more breathing room for the next two years. Of course, that's keeping everything stagnant."
This year, Shetler has led the effort to restrict employee travel and scrutinize requests to fill vacancies. On Monday he asked department heads to cut 1.5 percent from their 2012 budgets and 3 percent from their 2013 budgets.
He told the Courier & Press on Thursday that that's no longer necessary, but if "they can find the 1.5 percent, go for it."
Shetler said he's glad that the council probably won't have to tap into the county's $4.6-million emergency fund to balance the 2012 and 2013 budgets.
...
Treasurer Rick Davis said the state's mishap undoubtedly affected this year's tax bills because COIT funds are a factor in determining tax rates.
...
http://www.courierpress.com/news/2012/apr/05/no-headline---ev_revenue-county/
Thursday, April 5, 2012
Vigo County Expects $5 Million from State Funding Shortfall
From the Terre Haute Tribune Star:
Vigo County can expect about $5 million in additional CAGIT and EDIT funds from the State of Indiana after a computer error was discovered recently in Indianapolis.
State officials announced today that Vigo County got shortchanged by about $1.4 million in CAGIT funds in 2011 and was set to be shortchanged another $1.66 million this year. The county was shorted more than $930,000 in EDIT funds in 2011 and was set to be shortchanged another $1.1 million in 2012.
The county’s CAGIT money is distributed to all of the taxing entities in Vigo County, which include schools, public libraries and townships, said Kylissa Miller, chief deputy auditor. EDIT money is distributed to the City of Terre Haute, the Vigo County government, Seelyville, Riley and West Terre Haute.
http://tribstar.com/latest/x1224373401/Vigo-County-expecting-about-5M-in-tax-windfall
Vigo County can expect about $5 million in additional CAGIT and EDIT funds from the State of Indiana after a computer error was discovered recently in Indianapolis.
State officials announced today that Vigo County got shortchanged by about $1.4 million in CAGIT funds in 2011 and was set to be shortchanged another $1.66 million this year. The county was shorted more than $930,000 in EDIT funds in 2011 and was set to be shortchanged another $1.1 million in 2012.
The county’s CAGIT money is distributed to all of the taxing entities in Vigo County, which include schools, public libraries and townships, said Kylissa Miller, chief deputy auditor. EDIT money is distributed to the City of Terre Haute, the Vigo County government, Seelyville, Riley and West Terre Haute.
http://tribstar.com/latest/x1224373401/Vigo-County-expecting-about-5M-in-tax-windfall
Allen County to Receive $15 Million from State Accounting Error
From the Fort Wayne News Sentinel:
A $206 million blunder will cost a top state official his job but represents a $15 million windfall for various governments in Allen County. But that doesn't necessarily mean taxpayers will get a refund – or government employees a raise.
Nick Jordan, Allen County's chief deputy auditor, said the recent discovery of the Indiana Department of Revenue's underpayment to local authorities means Allen County will receive an additional $4.4 million in county option income taxes (COIT) and $2.9 million in county economic development income taxes (CEDIT) for 2011 and about $4.4 million in COIT and $3.7 million in CEDIT for this year. How much each unit of government receives – that includes cities, towns, the county, airport, library and others – must still be determined, Jordan said.
Schools do not receive income taxes and as a result will not be affected.
...
Jordan said the county should receive about $10 million almost immediately, with the remaining $5.4 million distributed throughout the year.
“It's bad for the state, but good for us,” Jordan said.
But because the money represents a one-time payback, not an ongoing increase in available revenues, members of city and county councils agreed it should not be used in a way that creates permanent financial obligations.
“It should be earmarked for neighborhood improvements,” said City Council President Tom Smith, R-1st. “That's the No. 1 thing Council members talk about. We're always looking for ways to fix our streets. And it would help promote economic development.”
With about $20 million in cash reserves, Smith said it's doubtful the city will need to put its share into its rainy day fund.
Allen County Council member and former President Darren Vogt suggested the county could put some of its share into its $17 million rainy day fund, but agreed that any money spent should be for one-time capital projects such as roads, not for salaries and other ongoing expenses.
“That's not revenue we can count on in the future,” he said. “We will have to sit down and set our priorities.” County officials had previously suggested additional cuts could be needed in the 2013 budget because of anticipated revenue decreased.
...
http://www.news-sentinel.com/apps/pbcs.dll/article?AID=/20120405/NEWS/120409758
A $206 million blunder will cost a top state official his job but represents a $15 million windfall for various governments in Allen County. But that doesn't necessarily mean taxpayers will get a refund – or government employees a raise.
Nick Jordan, Allen County's chief deputy auditor, said the recent discovery of the Indiana Department of Revenue's underpayment to local authorities means Allen County will receive an additional $4.4 million in county option income taxes (COIT) and $2.9 million in county economic development income taxes (CEDIT) for 2011 and about $4.4 million in COIT and $3.7 million in CEDIT for this year. How much each unit of government receives – that includes cities, towns, the county, airport, library and others – must still be determined, Jordan said.
Schools do not receive income taxes and as a result will not be affected.
...
Jordan said the county should receive about $10 million almost immediately, with the remaining $5.4 million distributed throughout the year.
“It's bad for the state, but good for us,” Jordan said.
But because the money represents a one-time payback, not an ongoing increase in available revenues, members of city and county councils agreed it should not be used in a way that creates permanent financial obligations.
“It should be earmarked for neighborhood improvements,” said City Council President Tom Smith, R-1st. “That's the No. 1 thing Council members talk about. We're always looking for ways to fix our streets. And it would help promote economic development.”
With about $20 million in cash reserves, Smith said it's doubtful the city will need to put its share into its rainy day fund.
Allen County Council member and former President Darren Vogt suggested the county could put some of its share into its $17 million rainy day fund, but agreed that any money spent should be for one-time capital projects such as roads, not for salaries and other ongoing expenses.
“That's not revenue we can count on in the future,” he said. “We will have to sit down and set our priorities.” County officials had previously suggested additional cuts could be needed in the 2013 budget because of anticipated revenue decreased.
...
http://www.news-sentinel.com/apps/pbcs.dll/article?AID=/20120405/NEWS/120409758
Lake County Commissioners Seek to Curb Deceptive Practices at Tax Auctions
From the Northwest Indiana Times:
Lake County commissioners want to bring the gavel down on deceptive bidders at their tax sales.
Commissioners voted Wednesday to authorize the county treasurer and the county attorney to pursue those who used last week's auction to dodge their full tax debts or who failed to pay for all the properties they purchased.
Commissioner Gerry Scheub, D-Crown Point, said he wants more stringent rules in place for the next sale in July to prevent future abuses.
The commissioners' two-day auction of tax-delinquent properties last week took in more than $3.4 million, Lake County Attorney John Dull said. However, he said there were problems.
...
Dull said he would like future bidders to pay by credit card so every land purchase at auction is accounted for and billed properly. Dull said the county now accepts cash or checks, a system that allows deceptive bidders to cheat the county by not paying for all purchases in the swirl of activity involving hundreds of bids on thousands of properties.
Commissioners also authorized the treasurer to cancel the sale of property to a bidder whose corporate name is "deceptively similar" to the owner of the delinquent property, Dull said.
State law forbids delinquent taxpayers from repurchasing their property at a lower amount than the taxes due.
Dull said he also will pursue bidders who appear to have been working on behalf of someone who was barred from bidding because they owed the county taxes on other properties.
...
Read more: http://www.nwitimes.com/news/local/lake/lake-county-commissioners-pursue-tax-auction-cheats/article_d6b93854-00d2-5831-b68f-77222768a34e.html#ixzz1rCWnBiaz
Lake County commissioners want to bring the gavel down on deceptive bidders at their tax sales.
Commissioners voted Wednesday to authorize the county treasurer and the county attorney to pursue those who used last week's auction to dodge their full tax debts or who failed to pay for all the properties they purchased.
Commissioner Gerry Scheub, D-Crown Point, said he wants more stringent rules in place for the next sale in July to prevent future abuses.
The commissioners' two-day auction of tax-delinquent properties last week took in more than $3.4 million, Lake County Attorney John Dull said. However, he said there were problems.
...
Dull said he would like future bidders to pay by credit card so every land purchase at auction is accounted for and billed properly. Dull said the county now accepts cash or checks, a system that allows deceptive bidders to cheat the county by not paying for all purchases in the swirl of activity involving hundreds of bids on thousands of properties.
Commissioners also authorized the treasurer to cancel the sale of property to a bidder whose corporate name is "deceptively similar" to the owner of the delinquent property, Dull said.
State law forbids delinquent taxpayers from repurchasing their property at a lower amount than the taxes due.
Dull said he also will pursue bidders who appear to have been working on behalf of someone who was barred from bidding because they owed the county taxes on other properties.
...
Read more: http://www.nwitimes.com/news/local/lake/lake-county-commissioners-pursue-tax-auction-cheats/article_d6b93854-00d2-5831-b68f-77222768a34e.html#ixzz1rCWnBiaz
Hobart City Council Approves Two Year Tax Break for Renovating Vacant Car Dealership Building
From the Northwest Indiana Times:
The City Council on Wednesday gave an initial OK for a two-year tax break to a local business planning to renovate and expand into a vacated car dealership.
Hobart could be the first city in the county to offer the new tax break — available for eligible vacant buildings in designated economic revitalization areas — if the City Council approves the measure at a May 2 public hearing, said Denarie Kane, the city's economic development director.
So far no other cities or towns have offered the tax incentive, Kane said.
Plans by Midwest Service Center, 408 S. Shelby St., are to purchase and renovate the former Isakson Motor Sales.
The longtime car dealership, 3530 N. Hobart Road, closed two years ago when Chrysler Group LLC terminated agreements with more than 700 dealers nationwide.
...
Read more: http://www.nwitimes.com/news/local/lake/hobart/company-aims-to-renovate-vacant-hobart-building/article_176c5a4e-9064-5bdd-be56-7e8e1f679a54.html#ixzz1rCVtXmPV
The City Council on Wednesday gave an initial OK for a two-year tax break to a local business planning to renovate and expand into a vacated car dealership.
Hobart could be the first city in the county to offer the new tax break — available for eligible vacant buildings in designated economic revitalization areas — if the City Council approves the measure at a May 2 public hearing, said Denarie Kane, the city's economic development director.
So far no other cities or towns have offered the tax incentive, Kane said.
Plans by Midwest Service Center, 408 S. Shelby St., are to purchase and renovate the former Isakson Motor Sales.
The longtime car dealership, 3530 N. Hobart Road, closed two years ago when Chrysler Group LLC terminated agreements with more than 700 dealers nationwide.
...
Read more: http://www.nwitimes.com/news/local/lake/hobart/company-aims-to-renovate-vacant-hobart-building/article_176c5a4e-9064-5bdd-be56-7e8e1f679a54.html#ixzz1rCVtXmPV
Tri-Creek School Board Seeks $344,000 Technology Loan
From the Northwest Indiana Times:
The Tri-Creek School Board agreed to ask the state for a $344,000 loan for technology.
During a special early morning session Monday, the board agreed to business manager Tom Dykiel's request to petition the state for the money from the Common School Fund for the Educational Technology Program.
The board also readopted the tax rate for the district's Capital Projects Plan because of a clerical error.
Read more: http://www.nwitimes.com/news/local/lake/lowell/tri-creek-school-board-seeks-loan-for-technology/article_0dc1a793-e866-5ad7-a882-10ab2a4b1d09.html#ixzz1rCVEonrz
The Tri-Creek School Board agreed to ask the state for a $344,000 loan for technology.
During a special early morning session Monday, the board agreed to business manager Tom Dykiel's request to petition the state for the money from the Common School Fund for the Educational Technology Program.
The board also readopted the tax rate for the district's Capital Projects Plan because of a clerical error.
Read more: http://www.nwitimes.com/news/local/lake/lowell/tri-creek-school-board-seeks-loan-for-technology/article_0dc1a793-e866-5ad7-a882-10ab2a4b1d09.html#ixzz1rCVEonrz
Indianapolis Star Reports Revenue Error Cost Counties $206 Milllion
For the second time in only four months, the state is admitting it made a massive revenue error.
This one cost counties $206 million in revenue that they have been owed from January 2011 to now and which will be repaid with interest as of April 5. The first, announced last December, resulted in a $320 million windfall to the state’s general fund.
...
Both resulted from programming errors, though of a different nature. The first involved electronic checks by corporations that were not properly accounted for in the state’s general fund; the new error comes from miscalculations of how much counties are owed in income tax collections.
...
Due to the error, Marion County will be getting $33.8 million. Hamilton County will get $17.3 million, Hendricks County about $4.8 million, Johnson County about $3.8 million, Hancock County about $2 million, Shelby County just over $1 million and Morgan County about $3.5 million.
But with interest and additional distributions for cities, plus the higher revenues they can now expect going forward now that this problem has been fixed, the totals are even higher. Indianapolis Mayor Greg Ballard said in a statement that the city and Marion County will get $41 million for the City-County general operating funds. Combined, all taxing units in Marion County will get a total of $55 million, Ballard said.
“I am directing the City Controller to hold this unanticipated and unbudgeted revenue in reserve to help address our 2013 budget needs,” Ballard said. “This new money does not remove the pressure on us to continue to cut costs and find new savings, and it will require city and county agency heads and elected officials to live within their means and fight the urge to spend it now.”
...
Spokesmen for associations that represent counties, cities and towns said the money will ease local budget situations, which have been stretched particularly since the state enacted property tax caps. And they applauded the state’s decision to have an independent set of eyes look at the state’s revenue system.
Horst said the discovery, which will drain funds from the state’s general fund, will not impact plans to put more money into full-day kindergarten and to provide for automatic taxpayer refunds. With other revenue collections exceeding expectations, he said, the state remains on track to give income taxpayers about $65 each as a credit on their taxes next year.
http://www.indystar.com/article/20120405/NEWS05/120405018/State-agency-s-mistakes-total-more-than-500M-four-months?odyssey=tab|topnews|text|IndyStar.com
This one cost counties $206 million in revenue that they have been owed from January 2011 to now and which will be repaid with interest as of April 5. The first, announced last December, resulted in a $320 million windfall to the state’s general fund.
...
Both resulted from programming errors, though of a different nature. The first involved electronic checks by corporations that were not properly accounted for in the state’s general fund; the new error comes from miscalculations of how much counties are owed in income tax collections.
...
Due to the error, Marion County will be getting $33.8 million. Hamilton County will get $17.3 million, Hendricks County about $4.8 million, Johnson County about $3.8 million, Hancock County about $2 million, Shelby County just over $1 million and Morgan County about $3.5 million.
But with interest and additional distributions for cities, plus the higher revenues they can now expect going forward now that this problem has been fixed, the totals are even higher. Indianapolis Mayor Greg Ballard said in a statement that the city and Marion County will get $41 million for the City-County general operating funds. Combined, all taxing units in Marion County will get a total of $55 million, Ballard said.
“I am directing the City Controller to hold this unanticipated and unbudgeted revenue in reserve to help address our 2013 budget needs,” Ballard said. “This new money does not remove the pressure on us to continue to cut costs and find new savings, and it will require city and county agency heads and elected officials to live within their means and fight the urge to spend it now.”
...
Spokesmen for associations that represent counties, cities and towns said the money will ease local budget situations, which have been stretched particularly since the state enacted property tax caps. And they applauded the state’s decision to have an independent set of eyes look at the state’s revenue system.
Horst said the discovery, which will drain funds from the state’s general fund, will not impact plans to put more money into full-day kindergarten and to provide for automatic taxpayer refunds. With other revenue collections exceeding expectations, he said, the state remains on track to give income taxpayers about $65 each as a credit on their taxes next year.
http://www.indystar.com/article/20120405/NEWS05/120405018/State-agency-s-mistakes-total-more-than-500M-four-months?odyssey=tab|topnews|text|IndyStar.com
Wednesday, April 4, 2012
Department of Local Government Finance Issues Guidance Implementing HEA 1072
For purposes of determining an eligible school corporation's transportation fund maximum levy for 2013, the school corporation will be treated as having a maximum levy for the fund in 2012 that is equal to the amount the school corporation would have had in 2012 if:
(1) the school corporation's maximum levy is recalculated for 2009 to eliminate any loss in its maximum levy for the fund; and
(2) the school corporation is treated as having levied the entire amount of its recalculated maximum levy for the fund in 2009, 2010 and 2011;
as determined by the Department of Local Government Finance.
This is a permanent adjustment in the school corporation's maximum levy for the fund.
http://www.in.gov/dlgf/files/120404_Adjustment_to_Transportation_Fund_Max_Levy.pdf
(1) the school corporation's maximum levy is recalculated for 2009 to eliminate any loss in its maximum levy for the fund; and
(2) the school corporation is treated as having levied the entire amount of its recalculated maximum levy for the fund in 2009, 2010 and 2011;
as determined by the Department of Local Government Finance.
This is a permanent adjustment in the school corporation's maximum levy for the fund.
http://www.in.gov/dlgf/files/120404_Adjustment_to_Transportation_Fund_Max_Levy.pdf
Editorial in the Ft Wayne Journal-Gazette Finds "the Good, the Bad, and the Ugly" in Property Tax Reform
Tax policy lessons
A property tax report from Indiana’s nonpartisan
Legislative Services Agency offers the good, the bad and the ugly from changes
wrought by 2008’s property tax overhaul. The ugliest effect is the inequitable
distribution of tax-cap credits favoring owners of higher-priced homes.
Ideally, the report could serve as a guideline
in creating a more equitable property tax policy, but the mad rush to enshrine
tax-cap limits in the state constitution before their full effects were known
most likely means Hoosiers are stuck with them.
Going forward, the report should inform the
state’s overall tax policy. One good feature is that taxpayers appear to have
more stability in their property tax bills. But a tax system perceived to be
unfair is even more troubling than an unpredictable one.
The good
•Ninety-two percent of homeowners saw a lower
tax bill in 2011 than in 2007.
•The average homestead tax bill decreased by
30.3 percent.
•Almost 20 percent of homesteads saw decreases
of 50 percent or more.
The bad
•The elimination of the homestead credit, phased
out entirely last year, resulted in a 4.4 percent property tax increase in
2011.
•Reductions in local credits contributed to
large percentage increases in homestead tax bills in several counties,
including Noble, Wabash and Wells.
•Since the state switched to market-value
assessments in 2002, bills due in 2011 were the first to show effects of a
deduction in gross assessed value of property. It fell from 2009 to 2010 –
apparently the effect of the recession.
The ugly
•Nine percent of tax levies for schools and
local governments were lost to circuit-breaker tax caps in 2011, for a total of
$616 million in lost revenue statewide.
•Forty-two percent of the tax credits were for
properties falling under the 2 percent tax-cap limit, which applies to rental
property and second homes.
•Property values reduced by the recession
resulted in higher 2011 tax rates, while higher rates made more property owners
eligible for tax-cap credits. Because the increase in credits exceeded the
increase in the levy, property tax revenue decreased in some counties,
including Allen County.
In addition to the statewide report, Allen
County Auditor Tera Klutz prepared an annual property tax report that offers an
interesting look at how the circuit-breaker credits play out. A breakdown by
taxing district gives a clear picture of how the credits flow primarily to
those areas with multiple layers of taxation and to property owners with more
expensive homes. In the Leo-Cedarville taxing district, for example, a
homestead property must be assessed at $279,710 before the circuit-breaker is
triggered. Only 26 homeowners there received a credit for 2012.
By contrast, practically all Hoosiers are paying
more as a result of the 2008 sales-tax increase of 17 percent that helped fund
the property tax cut, a regressive policy that went into effect just as the
full effects of the economic downturn were felt.
Who benefits
Some lessons emerge: While nearly all homeowners
have realized a break since the property tax overhaul, the tax-cap credits have
disproportionately flowed to owners of more costly properties. But the lost
revenue for schools, libraries and other local units of government affects all
Hoosiers, even those who didn’t receive a tax credit.
The next time tax policy changes are proposed,
lawmakers should be reminded of who came out ahead this time around.
Porter County Seeks Funding From Peers for Enhanced 911 Shortfall
From the Northwest
Indiana Times:
The Porter County Council is turning to its peers at the
municipal level to seek help in covering an estimated $2 million annual
shortfall for Enhanced 911 expected to hit by the middle of next year.
Council members are aware municipalities are facing their
own funding shortfalls, but feel they have little choice after efforts
downstate to address the problem fell short.
"The answer is not going to come from the state of
Indiana," said Councilman Jim Biggs, R-1st.
The council said it is unlikely the state would allow the
county to fund the salary and benefit portion of the E911 budget with proceeds
from the county income tax.
Council President Dan Whitten, D-at large, said he will
invite representatives from the various cities and towns to the next council
meeting to discuss the situation in public.
…
Lafayette School Board Votes to Give New Superintendent 3.8% Raise Despite Expected Deficit
From the
Lafayette Journal-Courier:
…
http://www.jconline.com/apps/pbcs.dll/article?AID=2012204040314&nclick_check=1
Community and patrons can meet Lafayette School
Corp.'s soon-to-be leader on Thursday.
Les Huddle was selected in January as the
successor to outgoing Superintendent Ed Eiler, who will retire this summer.…
Events in Jacksonville have kept Huddle
busy in recent weeks. The district championed a countywide one-cent sales tax
referendum that voters turned down March 20, leaving the district with an
expected $4.4 million deficit next year.
On March 21 the Jacksonville school board
voted to give Huddle a 3.8 percent raise -- equaling almost $6,000.
Jacksonville community members have voiced criticism of the move, and the
Jacksonville Journal-Courier newspaper has asked the attorney general's office
to formally investigate whether the school board violated the state's open
meetings law; the board did not include the raise on the meeting agenda
released to the public.
Board President Mindy Olson has said the
additional compensation had been built into this year's budget from the
beginning and credited the agenda to an unintentional oversight.
…http://www.jconline.com/apps/pbcs.dll/article?AID=2012204040314&nclick_check=1
Clarksville Files Second Lien Against Former Colgate-Palmolive Plant Property
From the
Jeffersonville News and Tribune:
The town of Clarksville has filed a second lien on the
old Colgate-Palmolive Co. plant property, related to non-payment of stormwater
fees.
Boston Development Group, the company that owns the property, disputes the town’s claim that any money is owed.
According to the Clark County Auditor’s Office, two liens — totaling $13,220 — have been filed against the company. The most recent lien was just put on the books March 21.
…
Boston Development Group, the company that owns the property, disputes the town’s claim that any money is owed.
According to the Clark County Auditor’s Office, two liens — totaling $13,220 — have been filed against the company. The most recent lien was just put on the books March 21.
…
http://newsandtribune.com/local/x1451005006/Another-lien-filed-on-former-Colgate-plant
The Evansville Courier Reports that Whirlpool Stopped Applying for its County Tax Abatements in 2010
A lengthy
story in the Evansville Courier-Press about Whirlpool’s Tax Incentive
Repayment. An excerpt follows:
In 2009,
shortly after Whirlpool announced it would shutter its Evansville refrigerator
plant, the company announced it would retain its product development center
here.
At that
time, the Indiana Economic Development Corp. said it would allow Whirlpool to
retain the $1.1 million in tax credits provided Whirlpool maintained operations
in Evansville through 2013.…
Last fall,
Whirlpool announced it would consolidate its North American procurement jobs to
the Benton Harbor, Mich. area. That consolidation was completed at the end of
2011, Whirlpool Corp. spokeswoman Kristine Vernier said in an email.
The move
left Evansville’s Whirlpool site with about 230 jobs, which falls below the
previously agreed upon number.
“Our
(incentives) are performance-based and prorated, so the $800,000 is a recapture
of funds for the employees who are no longer there,” said IEDC spokeswoman
Katelyn Hancock.
…
In 1996 and
2003, Whirlpool received Vanderburgh County tax abatements that would have
expired in 2011 and 2015, respectively.
Tax
abatements reduce a company’s tax burden by reducing the assessed value of new
equipment or buildings. The incentives typically are granted in return for a
company’s promise to hire a certain number of employees and make a certain
amount of investment in their sites. Each year, companies that want to continue
their tax abatements must submit paperwork showing how they have honored their
commitments — or why they’ve fallen short.
Whirlpool
quit applying for the abatement in 2010.
See the
full story here:http://www.courierpress.com/news/2012/apr/03/whirlpool-pay-indiana-800000-falling-below-agreed/
Tuesday, April 3, 2012
Revenue Finds Use Tax on Recreational Vehicle Purchase Barred by Statute of Limitations
Taxpayer purchased a recreational vehicle on December 17,
2007. The Department issued a proposed assessment for this transaction on July
5, 2011.
Taxpayer allegedly purchased the second and third
recreational vehicles in 2006. The Department issued a second proposed
assessment on July 5, 2011.
IC § 6-8.1-5-2(a) states:
Except as otherwise provided in this section, the department may not
issue a proposed assessment under section 1 of this chapter more than three (3)
years after the latest of the date the return is filed, or either of the
following: (1) The due date of the
return. (2) In the case of a return
filed for the state gross retail or use tax, the gasoline tax, the special fuel
tax, the motor carrier fuel tax, the oil inspection fee, or the petroleum
severance tax, the end of the calendar year which contains the taxable period
for which the return is filed.
The three-year statute of limitations applies in the absence
of proof of fraud by clear and convincing evidence or a taxpayer's failure to
file a return. See IC § 6-8.1-5-2(f). As noted in Part I above, there is no
evidence of either of these circumstances in this case.
Because Taxpayer is not a registered retail merchant,
Taxpayer would have been required to report use tax on the 2006 and 2007 transactions
on his individual IT-40 income tax returns due on April 17, 2007 and April 15,
2008.
Any additional assessment on the 2006 transactions (even
assuming Taxpayer indeed purchased those vehicles and furthermore purchased
them on the latest day possible in 2006, December 31st) would be
barred by the statute of limitations if issued after April 19, 2010. Since the
Department issued the assessment on July 5, 2011, this assessment is barred by
the statute of limitations.
Any additional assessment on the 2007 transaction would be
barred by the statute of limitations if issued after April 15, 2011. Since the
Department issued the assessment on July 5, 2011, this assessment is also
barred by the statute of limitations.
…
Lafayette City Council Approves Four Abatement Requests
From the Lafayette Journal Courier:
A group of tax abatement requests passed with flying colors during Monday night's Lafayette City Council meeting.
...
Rea Magnet Wire asked for a seven-year tax abatement on $7.5 million worth of new equipment to replace aging machines. The abatement includes equipment for a new process for copper refining, adding nine jobs.
Alcoa's request was a 10-year property tax abatement on real estate and new equipment. The requests are part of Alcoa's $93 million investment to construct an aluminum lithium casting plant on its property along Teal Road near Sagamore Parkway. Alcoa's new line will create 75 jobs.
Heartland Automotive requested a 10-year abatement to build a $8.4 million, 126,000 square-foot manufacturing facility at Park 350, the industrial park at Veterans Memorial Parkway and U.S. 52. Heartland Automotive would then move out of its leased 71,000 square-foot plant at 1520 Kepner Drive.
With its abatement, Wabash National plans to begin production on a vacuum tank trailer later this year. The new line will require a $750,000 investment in equipment and will produce 60 or more new jobs.
Each request was unanimously approved by the city council.
...
http://www.jconline.com/apps/pbcs.dll/article?AID=2012204030318
A group of tax abatement requests passed with flying colors during Monday night's Lafayette City Council meeting.
...
Rea Magnet Wire asked for a seven-year tax abatement on $7.5 million worth of new equipment to replace aging machines. The abatement includes equipment for a new process for copper refining, adding nine jobs.
Alcoa's request was a 10-year property tax abatement on real estate and new equipment. The requests are part of Alcoa's $93 million investment to construct an aluminum lithium casting plant on its property along Teal Road near Sagamore Parkway. Alcoa's new line will create 75 jobs.
Heartland Automotive requested a 10-year abatement to build a $8.4 million, 126,000 square-foot manufacturing facility at Park 350, the industrial park at Veterans Memorial Parkway and U.S. 52. Heartland Automotive would then move out of its leased 71,000 square-foot plant at 1520 Kepner Drive.
With its abatement, Wabash National plans to begin production on a vacuum tank trailer later this year. The new line will require a $750,000 investment in equipment and will produce 60 or more new jobs.
Each request was unanimously approved by the city council.
...
http://www.jconline.com/apps/pbcs.dll/article?AID=2012204030318
Whirlpool to Pay Back $800,000 in Tax Credits
From the Indianapolis Star:
Whirlpool Corp. will honor its commitment to pay the state of Indiana $800,000 after a loss of jobs at the company's Evansville product-development facility.
Following a cut in manufacturing jobs in 2009, Whirlpool had agreed to keep 260 full-time positions in Evansville so it could retain previously awarded tax credits from the Indiana Economic Development Corp. The manufacturer now employs 230 people, all but 20 of which are Indiana residents, at that center.
http://www.indystar.com/apps/pbcs.dll/article?AID=2012204030359
Whirlpool Corp. will honor its commitment to pay the state of Indiana $800,000 after a loss of jobs at the company's Evansville product-development facility.
Following a cut in manufacturing jobs in 2009, Whirlpool had agreed to keep 260 full-time positions in Evansville so it could retain previously awarded tax credits from the Indiana Economic Development Corp. The manufacturer now employs 230 people, all but 20 of which are Indiana residents, at that center.
http://www.indystar.com/apps/pbcs.dll/article?AID=2012204030359
Monday, April 2, 2012
The Lafayette Journal Courier Analyzes the Impact of Tax Abatements on Schools
From the Lafayette Journal Courier:
Property tax abatements are an essential economic development tool, but in years past, this tool has been criticized for taking money out of classrooms by depriving schools tax revenues.
Property tax reforms adopted in 2008 eased the effects of abatements on school districts' general funds, which now are financed through the state's sales tax instead of property taxes.
Lafayette School Corp. Superintendent Ed Eiler said abatements used to concern school districts -- and other public entities -- over lost revenue that the abatements represented. They also were concerned that abatements might shift the tax burden to others, causing increases in taxes.
"The impact of abatements are on more of the support functions of the schools," Eiler said. "It does not have quite the impact on the classroom that it (did before property tax reforms)."
Property tax revenue allocated to school districts funds capital accounts that are used for facility maintenance and building projects, new school bus purchases and transportation expenses. Property taxes also fund school districts' debt services.
"Schools are less dependent on property taxes than they were," said Larry DeBoer of Purdue University's Department of Agricultural Economics. "(But) schools are still the biggest collector of property taxes in most counties."
In 2008 -- before the property tax reforms -- Tippecanoe County collected $195 million in property tax revenue. Of that, $115 million went to schools, DeBoer said. By comparison, Tippecanoe County collected $138 million in property taxes in 2011, and $66 million went to schools.
On the other side of the discussion, abatements are incentives to entice new developers to invest in an area or spur current businesses to expand.
Abatements gradually phase in property taxes over the life of the agreement. For example, a company receiving a 10-year real estate abatement does not pay any property taxes on the abated development the first year. One-tenth of the property taxes on the development is added each year until the end of the abatement when the company is paying 100 percent of the assessed value of the real estate.
Four abatements come before the Lafayette City Council today for approval. If approved, Alcoa Inc. and Heartland Automotive would receive 10-year abatements on real estate, and Wabash National and Rea Magnet Wire would receive seven-year abatements on personal property (equipment).
"Tax abatement is on new investment, not existing investment," said Dennis Carson, Lafayette's director of economic development. "It does not affect the existing tax base or assessed value of any of the taxing units in a negative way."
Carson's point is that abatements do not take tax revenue away from public entities. In fact, it gradually adds revenue.
Abatements are intended to be used only in a "but for" situation, DeBoer said, explaining the "but for" the abatement, the project would not have gone forward.
Carson noted this was the case in the Alcoa and Heartland Automotive developments, as well as for Rea Magnet and Wabash National.
Lafayette was competing with other Alcoa sites for a $93 million development, Carson said. And Heartland Automotive has been wined and dined by Clinton County economic developers in an attempt to lure them away from building a new factory in Lafayette at Park 350, where Heartland already owns land.
"In all of these cases we have right now for pending tax abatement, they were competitive deals where if it was not for tax abatement, these investments would be going somewhere else," Carson said. "Therefore, in these cases, all taxing units would receive nothing."
"You've got to look at the long-term effect," said Ross Sloat, business manager for West Lafayette schools.
Abatements bring in new development, but it might also increase the tax burden on others if tax rates are increased to cover public entities' expenses, Sloat said.
DeBoer warned that if tax levies go up, public entities run the risk of actually losing money because some properties would hit tax caps established in the 2008 reforms and adopted into the Indiana Constitution in 2010.
"With tax caps, it's important to abate only property that would not have been there," DeBoer said.
New development brings more jobs to the community, driving more local and state taxes, which is another reason for abatements, Carson said.
"Other taxes are generated, such as COIT (county optional income tax), EDIT (economic development income tax), sales and use taxes," he said.
"The jobs and investment from these companies will create six or seven additional jobs in the community through suppliers, service and other small businesses," Carson said. "The employees from these companies will buy homes, eat in restaurants and frequent many local businesses, all contributing to the local economy that supports our schools -- not to mention that many of companies are leaders in community efforts such as Read to Succeed among other things."
DeBoer noted that for schools, this growth can be a double-edge sword.
It's true that more people might move to the area, buy houses and pay taxes. But schools are left to finance the education of more students while tax revenues catch up to the population shift, DeBoer said.
If, for example, an abatement is approved in the Lafayette school district, but new employees move their families to Tippecanoe school district, Tippecanoe School Corp. doesn't receive the eventual tax revenues from those corporate investments, DeBoer noted.
Bringing the discussion full circle, Eiler pointed out that the benefits of abatements outweigh the delay in receiving revenue from higher assessed values caused by abatements.
"We're in this together," Eiler said. "There's got to be some give and take."
"We're going to be very supportive of having a vibrant economic community. I think we're all beneficiaries of a healthy economy."
"These investments, at least here in Lafayette, help to keep Lafayette growing," Carson said, "thereby supporting and increasing all assessed values, and at the same time, keeping the tax rate stable that helps keep the tax caps from kicking in."
http://www.jconline.com/apps/pbcs.dll/article?AID=2012204020312
Property tax abatements are an essential economic development tool, but in years past, this tool has been criticized for taking money out of classrooms by depriving schools tax revenues.
Property tax reforms adopted in 2008 eased the effects of abatements on school districts' general funds, which now are financed through the state's sales tax instead of property taxes.
Lafayette School Corp. Superintendent Ed Eiler said abatements used to concern school districts -- and other public entities -- over lost revenue that the abatements represented. They also were concerned that abatements might shift the tax burden to others, causing increases in taxes.
"The impact of abatements are on more of the support functions of the schools," Eiler said. "It does not have quite the impact on the classroom that it (did before property tax reforms)."
Property tax revenue allocated to school districts funds capital accounts that are used for facility maintenance and building projects, new school bus purchases and transportation expenses. Property taxes also fund school districts' debt services.
"Schools are less dependent on property taxes than they were," said Larry DeBoer of Purdue University's Department of Agricultural Economics. "(But) schools are still the biggest collector of property taxes in most counties."
In 2008 -- before the property tax reforms -- Tippecanoe County collected $195 million in property tax revenue. Of that, $115 million went to schools, DeBoer said. By comparison, Tippecanoe County collected $138 million in property taxes in 2011, and $66 million went to schools.
On the other side of the discussion, abatements are incentives to entice new developers to invest in an area or spur current businesses to expand.
Abatements gradually phase in property taxes over the life of the agreement. For example, a company receiving a 10-year real estate abatement does not pay any property taxes on the abated development the first year. One-tenth of the property taxes on the development is added each year until the end of the abatement when the company is paying 100 percent of the assessed value of the real estate.
Four abatements come before the Lafayette City Council today for approval. If approved, Alcoa Inc. and Heartland Automotive would receive 10-year abatements on real estate, and Wabash National and Rea Magnet Wire would receive seven-year abatements on personal property (equipment).
"Tax abatement is on new investment, not existing investment," said Dennis Carson, Lafayette's director of economic development. "It does not affect the existing tax base or assessed value of any of the taxing units in a negative way."
Carson's point is that abatements do not take tax revenue away from public entities. In fact, it gradually adds revenue.
Abatements are intended to be used only in a "but for" situation, DeBoer said, explaining the "but for" the abatement, the project would not have gone forward.
Carson noted this was the case in the Alcoa and Heartland Automotive developments, as well as for Rea Magnet and Wabash National.
Lafayette was competing with other Alcoa sites for a $93 million development, Carson said. And Heartland Automotive has been wined and dined by Clinton County economic developers in an attempt to lure them away from building a new factory in Lafayette at Park 350, where Heartland already owns land.
"In all of these cases we have right now for pending tax abatement, they were competitive deals where if it was not for tax abatement, these investments would be going somewhere else," Carson said. "Therefore, in these cases, all taxing units would receive nothing."
"You've got to look at the long-term effect," said Ross Sloat, business manager for West Lafayette schools.
Abatements bring in new development, but it might also increase the tax burden on others if tax rates are increased to cover public entities' expenses, Sloat said.
DeBoer warned that if tax levies go up, public entities run the risk of actually losing money because some properties would hit tax caps established in the 2008 reforms and adopted into the Indiana Constitution in 2010.
"With tax caps, it's important to abate only property that would not have been there," DeBoer said.
New development brings more jobs to the community, driving more local and state taxes, which is another reason for abatements, Carson said.
"Other taxes are generated, such as COIT (county optional income tax), EDIT (economic development income tax), sales and use taxes," he said.
"The jobs and investment from these companies will create six or seven additional jobs in the community through suppliers, service and other small businesses," Carson said. "The employees from these companies will buy homes, eat in restaurants and frequent many local businesses, all contributing to the local economy that supports our schools -- not to mention that many of companies are leaders in community efforts such as Read to Succeed among other things."
DeBoer noted that for schools, this growth can be a double-edge sword.
It's true that more people might move to the area, buy houses and pay taxes. But schools are left to finance the education of more students while tax revenues catch up to the population shift, DeBoer said.
If, for example, an abatement is approved in the Lafayette school district, but new employees move their families to Tippecanoe school district, Tippecanoe School Corp. doesn't receive the eventual tax revenues from those corporate investments, DeBoer noted.
Bringing the discussion full circle, Eiler pointed out that the benefits of abatements outweigh the delay in receiving revenue from higher assessed values caused by abatements.
"We're in this together," Eiler said. "There's got to be some give and take."
"We're going to be very supportive of having a vibrant economic community. I think we're all beneficiaries of a healthy economy."
"These investments, at least here in Lafayette, help to keep Lafayette growing," Carson said, "thereby supporting and increasing all assessed values, and at the same time, keeping the tax rate stable that helps keep the tax caps from kicking in."
http://www.jconline.com/apps/pbcs.dll/article?AID=2012204020312
Hammond City Council Approves Expansion of Redevelopment Area
From the Northwest Indiana Times:
With Potash Corp. breaking ground on its new facility in June, the city is positioning itself to provide $10 million in incentives to the company.
Potash is planning a $70 million rail transfer facility at Gibson Yard. The city floated the incentives to pay for infrastructure improvements necessary for Potash to build the facility.
The City Council on Monday approved expanding one of the city's redevelopment areas to cover the Potash site. That will allow the city to use tax increment financing to fund the incentives, said Phil Taillon, executive director of the Department of Planning and Development.
Taillon said expanding the redevelopment area enables the city to give Potash the $10 million through the bond process.
Expanding the redevelopment area won't draw money from the city's general fund. Taxes currently being paid still will go to the city. What the expansion allows is for the redevelopment area to capture any new property tax revenue created by the project, Taillon said.
"By adding the site where Potash is going to locate into this TIF, we can now basically collect taxes that are going to be paid over the next 20 to 25 years," Taillon said.
The Redevelopment Commission still needs to give its final approval of the plan.
"We're not losing any tax money," said Tom Dabertin, chief of staff for Mayor Thomas McDermott Jr. "We're simply saying some of the additional tax money we will receive from Potash, some of that money will help pay for improvements that are necessary."
The project will generate 225 temporary construction jobs and 25 to 30 permanents positions for the city.
Read more: http://www.nwitimes.com/news/local/lake/hammond/hammond-looks-to-expand-redevelopment-area-for-potash-project/article_2fee8c21-8f88-51de-ba98-d918b3faf35a.html#ixzz1qvOKrNQ8
With Potash Corp. breaking ground on its new facility in June, the city is positioning itself to provide $10 million in incentives to the company.
Potash is planning a $70 million rail transfer facility at Gibson Yard. The city floated the incentives to pay for infrastructure improvements necessary for Potash to build the facility.
The City Council on Monday approved expanding one of the city's redevelopment areas to cover the Potash site. That will allow the city to use tax increment financing to fund the incentives, said Phil Taillon, executive director of the Department of Planning and Development.
Taillon said expanding the redevelopment area enables the city to give Potash the $10 million through the bond process.
Expanding the redevelopment area won't draw money from the city's general fund. Taxes currently being paid still will go to the city. What the expansion allows is for the redevelopment area to capture any new property tax revenue created by the project, Taillon said.
"By adding the site where Potash is going to locate into this TIF, we can now basically collect taxes that are going to be paid over the next 20 to 25 years," Taillon said.
The Redevelopment Commission still needs to give its final approval of the plan.
"We're not losing any tax money," said Tom Dabertin, chief of staff for Mayor Thomas McDermott Jr. "We're simply saying some of the additional tax money we will receive from Potash, some of that money will help pay for improvements that are necessary."
The project will generate 225 temporary construction jobs and 25 to 30 permanents positions for the city.
Read more: http://www.nwitimes.com/news/local/lake/hammond/hammond-looks-to-expand-redevelopment-area-for-potash-project/article_2fee8c21-8f88-51de-ba98-d918b3faf35a.html#ixzz1qvOKrNQ8
Lake Central School Corp's Actions Promoting Referendum Called into Question
From the Northwest Indiana Times:
An email from Lake Central School Corp.'s top official indicates district resources were used to push its voter referendum. But in a subsequent letter, the district denied an anti-referendum group access to the same resources.
Indiana law requires school corporations to provide equal access to facilities or equipment when promoting a position on a local referendum.
In a Sept. 8 email obtained by The Times, Lake Central Superintendent Larry Veracco told a parent he provided parents' email addresses to the political action committee supporting the referendum.
District officials later denied a request for the same records by a group opposing the referendum, which sought voters' approval to rebuild Lake Central High School and construct a new Protsman Elementary School.
The pro-referendum committee, Friends of Lake Central Schools, sent parents multiple emails in the months before the election.
Ultimately, voters approved the $160 million referendum in November, but not all parents were happy about receiving those messages.
"I do not know if it was an overt handover of my email address or if it was done by someone in the school system who was sympathetic to the cause, but I have a unique email address that I use for the RDS Parent Network and as the contact email on file with the school system," one parent wrote Veracco on Sept. 8. "That email has never been used anywhere else. ... I'm writing, as a supporter of the goals you have, to suggest that you risk undermining those goals by using (school) funds, facilities or information in support of that goal."
That parent asked to not be named because his child still attends Lake Central schools.
In response to that parent's email, Veracco wrote:
"We did provide parent email addresses for this initial PAC mailing so all parents (dozens of requests) know where to go for information. I realize that some of our parents may prefer that we spread the word in a manner other than email, but we made a decision to do so since we believe the greater majority will benefit."
The Times obtained copies of emails to and from Veracco through a public records request to the school district.
Residents opposed to the referendum argue Lake Central school officials gave the district and its supporters an unfair advantage in swaying public opinion.
'I was mistaken'
Veracco told The Times during a recent interview that he isn't sure why he sent that email. He said he later checked with the assistant superintendent and employees in the technology department, and they told him the district did not provide the parents' email list to the pro-referendum group.
"I believe, in hindsight, I was mistaken," Veracco said.
His denial comes despite his Sept. 8 email, which references specific actions taken by a Web consultant to disseminate the email addresses.
Veracco said the political action committee may have received parents' email addresses from some of Lake Central's Parent Teacher organizations, but representatives of four PTOs reached by The Times said they did not do so.
Chuck Pollen, chairman of the pro-referendum Friends of Lake Central Schools, said he does not know how the political action committee gathered parents' email addresses. He referred questions to pro-referendum volunteer coordinator Gina Marten. Marten declined comment, referring all questions to Lake Central School Corp.
Veracco said he rejected requests to use the school corporation's website or phone alert system to promote the referendum.
"We tried to follow the law the best we could," he said.
But this isn't the first time the district's adherence to election law has been questioned.
Other complaints
St. John resident Joe Hero and St. John Township resident Richard Hucker filed complaints in November and February with the Lake County elections board, claiming Lake Central School Corp. used school property and equipment to promote its referendum.
Hero and Hucker argue Friends of Lake Central Schools failed to report those items as in-kind contributions on its campaign finance reports.
Hero and Hucker, who opposed the referendum, also claim Lake Central School Corp. suppressed voters by directing volunteers to remove "vote no" signs, according to their complaint.
The Lake County elections board decided Tuesday to schedule a separate hearing to review the two men's allegations and any documentation. That hearing had not been scheduled as of Friday.
Veracco declined to comment on Hero and Hucker's allegations.
Unfair advantage?
Hucker said Lake Central School Corp. gave the pro-referendum group an unfair advantage.
"If they had done everything legal, and they had won the referendum legally, I probably would have been one of the first ones to congratulate them for doing a good job," Hucker said. "But that isn't how it was."
Hucker's complaints before the Lake County elections board do not include the school corporation's denial of his request for the same mailing list that the Sept. 8 email by Veracco indicates went to Friends of Lake Central Schools.
Hucker's public records request was filed Oct. 21 — a month and a half after Veracco sent an email saying the district had released parents' email addresses to the political action committee.
In a public records denial letter dated Nov. 2, Assistant Superintendent Al Gandolfi told Hucker that the district had no record of the political action committee requesting the records Hucker wanted.
Indiana Public Access Counselor Joe Hoage said a public entity can't deny access to a record it already has generated and given to another party.
But even if Lake Central School Corp. did give out parents' email addresses in violation of state law, it is unlikely school officials will be penalized for it.
Enforcing the law
The Lake County elections board, Indiana Department of Local Government Finance, Secretary of State's Indiana Election Division, Indiana Department of Education and Indiana attorney general's office said their offices have no jurisdiction over questions of state law pertaining to promoting a position on a referendum.
Ryan Preston, an office supervisor of schools and townships for the State Board of Accounts, said his agency would investigate only allegations relating to financial compliance — not the dissemination of parents' email addresses.
He confirmed the agency received a financially related complaint about Lake Central School Corp. in December. That complaint was added to a file that will be reviewed when the agency audits the school district.
The Lake County prosecutor's office has the power to file an infraction against anyone who violates state law requiring equal access to facilities and equipment when promoting a position on a referendum. Hucker said he also asked the prosecutor's office to file charges against the volunteers who removed his "vote no" signs — but he said he did not hear back.
Lake County Prosecutor Bernard Carter said his office has deferred to the Lake County elections board for a determination on whether the sign issue was a violation of law. He said if the board refers the case back to his office, he would take it.
Carter also said his office had not been asked to look into the issue of parents' email addresses — but he said he would do so if it came under his authority. He said he likely would ask Indiana State Police to handle that investigation.
Hero said he and Hucker will pursue all avenues to overturn the results of November's referendum and get the taxpayers restitution for what Hero believes was theft of public funds.
"You have a school system that is supposed to teach the children of St. John Township ethics and good citizenship, yet ... educators were giving pro-referendum people a campaign headquarters and using taxpayer dollars to promote their own agenda," Hero said. "It's a bad precedent to set with the young people."
Read more: http://www.nwitimes.com/news/local/lake/dyer/lake-central-school-corp-s-actions-during-referendum-questioned/article_a9ecfc71-6bf6-526a-a644-230eea07141c.html#ixzz1qvLlIux7
An email from Lake Central School Corp.'s top official indicates district resources were used to push its voter referendum. But in a subsequent letter, the district denied an anti-referendum group access to the same resources.
Indiana law requires school corporations to provide equal access to facilities or equipment when promoting a position on a local referendum.
In a Sept. 8 email obtained by The Times, Lake Central Superintendent Larry Veracco told a parent he provided parents' email addresses to the political action committee supporting the referendum.
District officials later denied a request for the same records by a group opposing the referendum, which sought voters' approval to rebuild Lake Central High School and construct a new Protsman Elementary School.
The pro-referendum committee, Friends of Lake Central Schools, sent parents multiple emails in the months before the election.
Ultimately, voters approved the $160 million referendum in November, but not all parents were happy about receiving those messages.
"I do not know if it was an overt handover of my email address or if it was done by someone in the school system who was sympathetic to the cause, but I have a unique email address that I use for the RDS Parent Network and as the contact email on file with the school system," one parent wrote Veracco on Sept. 8. "That email has never been used anywhere else. ... I'm writing, as a supporter of the goals you have, to suggest that you risk undermining those goals by using (school) funds, facilities or information in support of that goal."
That parent asked to not be named because his child still attends Lake Central schools.
In response to that parent's email, Veracco wrote:
"We did provide parent email addresses for this initial PAC mailing so all parents (dozens of requests) know where to go for information. I realize that some of our parents may prefer that we spread the word in a manner other than email, but we made a decision to do so since we believe the greater majority will benefit."
The Times obtained copies of emails to and from Veracco through a public records request to the school district.
Residents opposed to the referendum argue Lake Central school officials gave the district and its supporters an unfair advantage in swaying public opinion.
'I was mistaken'
Veracco told The Times during a recent interview that he isn't sure why he sent that email. He said he later checked with the assistant superintendent and employees in the technology department, and they told him the district did not provide the parents' email list to the pro-referendum group.
"I believe, in hindsight, I was mistaken," Veracco said.
His denial comes despite his Sept. 8 email, which references specific actions taken by a Web consultant to disseminate the email addresses.
Veracco said the political action committee may have received parents' email addresses from some of Lake Central's Parent Teacher organizations, but representatives of four PTOs reached by The Times said they did not do so.
Chuck Pollen, chairman of the pro-referendum Friends of Lake Central Schools, said he does not know how the political action committee gathered parents' email addresses. He referred questions to pro-referendum volunteer coordinator Gina Marten. Marten declined comment, referring all questions to Lake Central School Corp.
Veracco said he rejected requests to use the school corporation's website or phone alert system to promote the referendum.
"We tried to follow the law the best we could," he said.
But this isn't the first time the district's adherence to election law has been questioned.
Other complaints
St. John resident Joe Hero and St. John Township resident Richard Hucker filed complaints in November and February with the Lake County elections board, claiming Lake Central School Corp. used school property and equipment to promote its referendum.
Hero and Hucker argue Friends of Lake Central Schools failed to report those items as in-kind contributions on its campaign finance reports.
Hero and Hucker, who opposed the referendum, also claim Lake Central School Corp. suppressed voters by directing volunteers to remove "vote no" signs, according to their complaint.
The Lake County elections board decided Tuesday to schedule a separate hearing to review the two men's allegations and any documentation. That hearing had not been scheduled as of Friday.
Veracco declined to comment on Hero and Hucker's allegations.
Unfair advantage?
Hucker said Lake Central School Corp. gave the pro-referendum group an unfair advantage.
"If they had done everything legal, and they had won the referendum legally, I probably would have been one of the first ones to congratulate them for doing a good job," Hucker said. "But that isn't how it was."
Hucker's complaints before the Lake County elections board do not include the school corporation's denial of his request for the same mailing list that the Sept. 8 email by Veracco indicates went to Friends of Lake Central Schools.
Hucker's public records request was filed Oct. 21 — a month and a half after Veracco sent an email saying the district had released parents' email addresses to the political action committee.
In a public records denial letter dated Nov. 2, Assistant Superintendent Al Gandolfi told Hucker that the district had no record of the political action committee requesting the records Hucker wanted.
Indiana Public Access Counselor Joe Hoage said a public entity can't deny access to a record it already has generated and given to another party.
But even if Lake Central School Corp. did give out parents' email addresses in violation of state law, it is unlikely school officials will be penalized for it.
Enforcing the law
The Lake County elections board, Indiana Department of Local Government Finance, Secretary of State's Indiana Election Division, Indiana Department of Education and Indiana attorney general's office said their offices have no jurisdiction over questions of state law pertaining to promoting a position on a referendum.
Ryan Preston, an office supervisor of schools and townships for the State Board of Accounts, said his agency would investigate only allegations relating to financial compliance — not the dissemination of parents' email addresses.
He confirmed the agency received a financially related complaint about Lake Central School Corp. in December. That complaint was added to a file that will be reviewed when the agency audits the school district.
The Lake County prosecutor's office has the power to file an infraction against anyone who violates state law requiring equal access to facilities and equipment when promoting a position on a referendum. Hucker said he also asked the prosecutor's office to file charges against the volunteers who removed his "vote no" signs — but he said he did not hear back.
Lake County Prosecutor Bernard Carter said his office has deferred to the Lake County elections board for a determination on whether the sign issue was a violation of law. He said if the board refers the case back to his office, he would take it.
Carter also said his office had not been asked to look into the issue of parents' email addresses — but he said he would do so if it came under his authority. He said he likely would ask Indiana State Police to handle that investigation.
Hero said he and Hucker will pursue all avenues to overturn the results of November's referendum and get the taxpayers restitution for what Hero believes was theft of public funds.
"You have a school system that is supposed to teach the children of St. John Township ethics and good citizenship, yet ... educators were giving pro-referendum people a campaign headquarters and using taxpayer dollars to promote their own agenda," Hero said. "It's a bad precedent to set with the young people."
Read more: http://www.nwitimes.com/news/local/lake/dyer/lake-central-school-corp-s-actions-during-referendum-questioned/article_a9ecfc71-6bf6-526a-a644-230eea07141c.html#ixzz1qvLlIux7
The Ft. Wayne Journal-Gazette Analyzes the Impact of Property Tax Caps and Concludes that Taxpayers with Higher Valued Properties Disproportionately Benefit
From the Fort Wayne Journal Gazette:
Two years ago, nearly three-quarters of Hoosiers supported putting property tax caps in the state constitution.
Since then, those caps have saved land owners millions of dollars across Allen County and the state, but they haven’t helped everyone.
In fact, those caps have only helped owners of at least moderate homes and have disproportionately aided those with exceptionally expensive dwellings.
Allen County homeowners will save more than $16 million on their property tax bills this year because of the caps, but more than a third of that benefit will go to people living in homes worth $250,000 or more, according to analyses by The Journal Gazette and the county auditor. Those typically larger structures represent 7.2 percent of all homes in the county.
Homes in Allen County generally must have a tax value – which is supposed to represent market value – of about $100,000 to get any benefit at all. The actual tax cap benchmark varies wildly depending on where the property is located in the county (See chart, Page 6A).
In total, 31.5 percent of Allen County homeowners will receive some benefit from the caps this year – that number rises to 40 percent in Fort Wayne.
Rep. Win Moses, D-Fort Wayne, said the effect of the caps should not be a surprise to anyone, and was something he and other opponents tried to explain before the constitutional referendum. He said they were unsuccessful in explaining the issue or getting people to believe them.
“The intent of the legislation has been to shift the tax burden from the higher income to the middle and lower incomes,” he said. “This was not a tax reduction.”
What the caps mean in practice is that should property values remain consistent, any future property tax increases would only be felt by those living in less-expensive homes.
Sen. David Long, R-Fort Wayne, said it would be unfair to isolate the effect of property tax caps without looking at how other tax reforms have assisted Hoosiers, although he admitted the caps seem to get most of the attention.
“Everybody benefits from property tax reform significantly,” Long said.
He said the caps came at a time of property tax crisis, especially in Marion County, when homeowners were facing double-digit percentage increases on their tax bills. That is why the state took several steps to limit the growth, which included limiting government revenue growth and limiting the increase senior citizens can get on their tax bill.
He said the property tax caps were vital, however, because they ensure long-lasting relief for taxpayers.
“Without some permanent controls in there, you’d likely see the same erosion of our reforms over time,” Long said.
The caps limit the amount a property owner must pay based on the property’s value. Homeowners can’t pay more than 1 percent of their home’s value, while the limit is 2 percent for rental properties and farmland and 3 percent for businesses.
While the 1 percent cap is consistent for all homes, regardless of value, it affects homes differently because of other property tax relief measures taken by the state. The most basic is the standard homestead deduction, which reduces the taxable value of a home by 60 percent or $45,000 – whichever is less.
That means a $180,000 home has its taxed value reduced by a quarter, while a $90,000 home’s tax value is cut in half.
Because more of its value is cut, the less expensive home also has a larger portion of its tax bill reduced. This leaves larger homes with proportionally larger tax bills and thus more likely to hit the 1 percent tax cap.
“You are more likely to be eligible to be at the tax caps if you live in a more expensive home,” said Larry DeBoer, a professor at Purdue University and one of the pre-eminent experts on Indiana property taxes.
This means people in lower-priced homes are paying proportionally smaller bills, in comparison with their home’s value, than owners of higher-priced homes even with the caps.
But Moses said that argument omits a key part of the state’s property tax overhaul, which required raising sales tax from 6 percent to 7 percent.
“A sales tax is very regressive,” he said, noting lower and moderate income families have to spend a higher percentage of their incomes on necessities that include sales tax.
Moses also said it would be difficult to argue lower- and middle-class families weren’t paying their fair share, especially during a national recession.
The other property tax deductions also mean that the more expensive a home is, the more benefit it will receive from the tax caps.
For example, take two neighboring homes in Washington Township in Fort Wayne. One has a tax value of $442,900 and the neighboring home has a tax value of $250,900. Both homes save money under the property tax caps, but the more expensive home sees a 34.6 percent cut in its tax bill because of the caps while the smaller house receives a 28.5 percent tax break.
The value a home must have before it hits the property tax caps varies across the county. The higher an area’s tax rate is, the lower a home’s value has to be before it hits the cap.
In Fort Wayne, that value is about $100,000, although the city has its own variances. Residents living in northwest Perry Township have the lowest threshold in the county at $84,090, and because the median home value in the area is an estimated $170,200 nearly 95 percent of all homes there reached the tax caps.
This is the highest percentage in the county, followed by 85 percent of homeowners benefiting from the cap that live in the portion of Aboite Township that was annexed into the city.
Conversely, only 12.1 percent of homes receive property tax relief in Wayne Township in Fort Wayne. This is despite having a minimum value to hit the cap – $95,965 – that is similar to the minimum in Aboite – $99,040.
The difference is the median property value in Wayne Township is $75,000 compared to $173,600 in Aboite.
The swings are even wilder outside Fort Wayne, where tax rates vary dramatically. A resident in rural Jackson Township – and it is all rural – would need to have a home valued at more than $1 million to see any property tax cap relief. No homeowner met that threshold.
In unincorporated Aboite Township, a home must be worth nearly $800,000 to get a benefit from the caps, and 26 homes will receive some relief this year.
In the aggregate, property owners in Allen County receive $35.3 million in relief from the property tax caps this year. Of that total, about $16 million went toward homes, including nearly $500,000 in special relief for senior citizens.
There are 6,967 homes in the county valued at more than $250,000, and 4,415 of those homes receive some tax cap benefit. In aggregate those 4.5 percent of all county households received $6.4 million in cuts to their tax bills from the state caps.
Some of this benefit might fall under other tax caps for homes with huge chunks of land or large swimming pools, but the vast majority would be under the 1 percent cap for homes, according to Nicholas Jordan, Allen County deputy auditor. Jordan said it would be safe to assume that less than $1 million of the benefit received by larger home owners were as a result of those other caps.
This means between 33 percent and 40 percent of homeowners’ property tax relief went to people living in quarter-million-dollar homes.
Despite the disparity in benefit of the circuit breaker, Rep. Moses said it is highly unlikely to find any Hoosiers thinking property taxes should be higher.
“Nobody that did get a (tax decrease) will argue that it is inappropriate,” he said.
That means local governments must assume that the caps, which are in the constitution, are here to stay.
But unlike other property tax relief, the tax caps come with no alternative financing source. State homestead deductions could be countered with higher tax rates, and local relief is financed with income taxes. The caps, however, mean local governments such as cities, libraries and schools don’t collect as much revenue as they could.
Sen. Long said that was exactly the point.
“It is forcing local government to become more efficient,” he said, noting that he was hopeful this limiting of revenues would force governments to examine some of the government reform recommendations made in previous years.
The caps, along with a few election-year decisions to freeze tax growth, have caused Fort Wayne’s net property tax revenues to drop annually since a peak of $99.4 million in 2007, the first year annexed residents in Aboite Township paid city property taxes.
Part of the problem facing local governments is the fact the caps hit at the same time the national economy collapsed. This not only hurt income taxes because fewer people were working, but it also led to a precipitous drop in property values in the area.
Since 2008, Fort Wayne properties – including homes, rentals and businesses – have seen a combined loss of more than $2 billion in value, according to the county’s assessor.
That plunge in property values means tax rates are pushed higher to collect the same amount of revenue, meaning more homes hit the circuit breaker and more revenues are lost. The hope is property values will eventually rebound and new construction will add more to the tax base, which DeBoer said will likely happen.
The slow erosion of its property tax stream prompted Mayor Tom Henry to convene a panel of tax experts, including DeBoer, to help the city create a sustainable fiscal policy in a world with property tax caps.
Fort Wayne Controller Pat Roller said the group met for the first time last week and will have a lot to discuss.
One of the concerns the tax caps create is that, should the city decide to increase property taxes, the only homeowners to feel that hit are the ones in lower-valued homes, she said, as long as property values remain flat.
Because more expensive homes are at their cap, any increase in tax rates has no effect on the homeowner’s bill. Homeowners not at the caps – those in less expensive homes – would continue to see their bills rise until they also hit the 1 percent cap.
While the caps have directly helped those living in larger homes, Moses said their effect will likely hurt people who receive no tax cap benefit at all.
“What it did is we are probably going to have a substantial reduction of service at some point and that is probably going to affect those that need them the most,” he said.
http://www.journalgazette.net/article/20120401/LOCAL/304019946
Two years ago, nearly three-quarters of Hoosiers supported putting property tax caps in the state constitution.
Since then, those caps have saved land owners millions of dollars across Allen County and the state, but they haven’t helped everyone.
In fact, those caps have only helped owners of at least moderate homes and have disproportionately aided those with exceptionally expensive dwellings.
Allen County homeowners will save more than $16 million on their property tax bills this year because of the caps, but more than a third of that benefit will go to people living in homes worth $250,000 or more, according to analyses by The Journal Gazette and the county auditor. Those typically larger structures represent 7.2 percent of all homes in the county.
Homes in Allen County generally must have a tax value – which is supposed to represent market value – of about $100,000 to get any benefit at all. The actual tax cap benchmark varies wildly depending on where the property is located in the county (See chart, Page 6A).
In total, 31.5 percent of Allen County homeowners will receive some benefit from the caps this year – that number rises to 40 percent in Fort Wayne.
Rep. Win Moses, D-Fort Wayne, said the effect of the caps should not be a surprise to anyone, and was something he and other opponents tried to explain before the constitutional referendum. He said they were unsuccessful in explaining the issue or getting people to believe them.
“The intent of the legislation has been to shift the tax burden from the higher income to the middle and lower incomes,” he said. “This was not a tax reduction.”
What the caps mean in practice is that should property values remain consistent, any future property tax increases would only be felt by those living in less-expensive homes.
Sen. David Long, R-Fort Wayne, said it would be unfair to isolate the effect of property tax caps without looking at how other tax reforms have assisted Hoosiers, although he admitted the caps seem to get most of the attention.
“Everybody benefits from property tax reform significantly,” Long said.
He said the caps came at a time of property tax crisis, especially in Marion County, when homeowners were facing double-digit percentage increases on their tax bills. That is why the state took several steps to limit the growth, which included limiting government revenue growth and limiting the increase senior citizens can get on their tax bill.
He said the property tax caps were vital, however, because they ensure long-lasting relief for taxpayers.
“Without some permanent controls in there, you’d likely see the same erosion of our reforms over time,” Long said.
Reason for disparity
While the 1 percent cap is consistent for all homes, regardless of value, it affects homes differently because of other property tax relief measures taken by the state. The most basic is the standard homestead deduction, which reduces the taxable value of a home by 60 percent or $45,000 – whichever is less.
That means a $180,000 home has its taxed value reduced by a quarter, while a $90,000 home’s tax value is cut in half.
Because more of its value is cut, the less expensive home also has a larger portion of its tax bill reduced. This leaves larger homes with proportionally larger tax bills and thus more likely to hit the 1 percent tax cap.
“You are more likely to be eligible to be at the tax caps if you live in a more expensive home,” said Larry DeBoer, a professor at Purdue University and one of the pre-eminent experts on Indiana property taxes.
This means people in lower-priced homes are paying proportionally smaller bills, in comparison with their home’s value, than owners of higher-priced homes even with the caps.
But Moses said that argument omits a key part of the state’s property tax overhaul, which required raising sales tax from 6 percent to 7 percent.
“A sales tax is very regressive,” he said, noting lower and moderate income families have to spend a higher percentage of their incomes on necessities that include sales tax.
Moses also said it would be difficult to argue lower- and middle-class families weren’t paying their fair share, especially during a national recession.
The other property tax deductions also mean that the more expensive a home is, the more benefit it will receive from the tax caps.
For example, take two neighboring homes in Washington Township in Fort Wayne. One has a tax value of $442,900 and the neighboring home has a tax value of $250,900. Both homes save money under the property tax caps, but the more expensive home sees a 34.6 percent cut in its tax bill because of the caps while the smaller house receives a 28.5 percent tax break.
Cap cutoffs
In Fort Wayne, that value is about $100,000, although the city has its own variances. Residents living in northwest Perry Township have the lowest threshold in the county at $84,090, and because the median home value in the area is an estimated $170,200 nearly 95 percent of all homes there reached the tax caps.
This is the highest percentage in the county, followed by 85 percent of homeowners benefiting from the cap that live in the portion of Aboite Township that was annexed into the city.
Conversely, only 12.1 percent of homes receive property tax relief in Wayne Township in Fort Wayne. This is despite having a minimum value to hit the cap – $95,965 – that is similar to the minimum in Aboite – $99,040.
The difference is the median property value in Wayne Township is $75,000 compared to $173,600 in Aboite.
The swings are even wilder outside Fort Wayne, where tax rates vary dramatically. A resident in rural Jackson Township – and it is all rural – would need to have a home valued at more than $1 million to see any property tax cap relief. No homeowner met that threshold.
In unincorporated Aboite Township, a home must be worth nearly $800,000 to get a benefit from the caps, and 26 homes will receive some relief this year.
In the aggregate, property owners in Allen County receive $35.3 million in relief from the property tax caps this year. Of that total, about $16 million went toward homes, including nearly $500,000 in special relief for senior citizens.
There are 6,967 homes in the county valued at more than $250,000, and 4,415 of those homes receive some tax cap benefit. In aggregate those 4.5 percent of all county households received $6.4 million in cuts to their tax bills from the state caps.
Some of this benefit might fall under other tax caps for homes with huge chunks of land or large swimming pools, but the vast majority would be under the 1 percent cap for homes, according to Nicholas Jordan, Allen County deputy auditor. Jordan said it would be safe to assume that less than $1 million of the benefit received by larger home owners were as a result of those other caps.
This means between 33 percent and 40 percent of homeowners’ property tax relief went to people living in quarter-million-dollar homes.
Unfunded benefit
“Nobody that did get a (tax decrease) will argue that it is inappropriate,” he said.
That means local governments must assume that the caps, which are in the constitution, are here to stay.
But unlike other property tax relief, the tax caps come with no alternative financing source. State homestead deductions could be countered with higher tax rates, and local relief is financed with income taxes. The caps, however, mean local governments such as cities, libraries and schools don’t collect as much revenue as they could.
Sen. Long said that was exactly the point.
“It is forcing local government to become more efficient,” he said, noting that he was hopeful this limiting of revenues would force governments to examine some of the government reform recommendations made in previous years.
The caps, along with a few election-year decisions to freeze tax growth, have caused Fort Wayne’s net property tax revenues to drop annually since a peak of $99.4 million in 2007, the first year annexed residents in Aboite Township paid city property taxes.
Part of the problem facing local governments is the fact the caps hit at the same time the national economy collapsed. This not only hurt income taxes because fewer people were working, but it also led to a precipitous drop in property values in the area.
Since 2008, Fort Wayne properties – including homes, rentals and businesses – have seen a combined loss of more than $2 billion in value, according to the county’s assessor.
That plunge in property values means tax rates are pushed higher to collect the same amount of revenue, meaning more homes hit the circuit breaker and more revenues are lost. The hope is property values will eventually rebound and new construction will add more to the tax base, which DeBoer said will likely happen.
The slow erosion of its property tax stream prompted Mayor Tom Henry to convene a panel of tax experts, including DeBoer, to help the city create a sustainable fiscal policy in a world with property tax caps.
Fort Wayne Controller Pat Roller said the group met for the first time last week and will have a lot to discuss.
One of the concerns the tax caps create is that, should the city decide to increase property taxes, the only homeowners to feel that hit are the ones in lower-valued homes, she said, as long as property values remain flat.
Because more expensive homes are at their cap, any increase in tax rates has no effect on the homeowner’s bill. Homeowners not at the caps – those in less expensive homes – would continue to see their bills rise until they also hit the 1 percent cap.
While the caps have directly helped those living in larger homes, Moses said their effect will likely hurt people who receive no tax cap benefit at all.
“What it did is we are probably going to have a substantial reduction of service at some point and that is probably going to affect those that need them the most,” he said.
http://www.journalgazette.net/article/20120401/LOCAL/304019946
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