From the Northwest Indiana Times:
Cost-saving measures outlined this week to reduce this year's projected $3.7 million budget shortfall will leave city departments with less money — and fewer workers.
A second round of layoffs, early retirement incentives and consolidation of city purchasing services that Mayor Anthony Copeland ordered are expected to save $1.3 million over the course of the year.
Though the city's 2012 budget of $32.6 million is $3 million less than last year, and $28.4 million less than in 2008, revenue has not kept up with expenses.
A number of factors contributed to the shortfall, Copeland said, including the state-mandated property tax caps, a reduced level of tax collections and a bloated city payroll.
...
Read more: http://www.nwitimes.com/news/local/lake/east-chicago/cuts-trim-m-from-e-c-budget-deficit/article_e2f93fad-d91b-590e-a943-5d24c41d4e83.html#ixzz1rqOLAhrN
Thursday, April 12, 2012
PEW Center Study Finds States Doing a Poor Job Tracking Effectiveness of Tax Breaks
From the Northwest Indiana Times:
Most states are doing a poor job tracking whether their tax breaks for businesses are actually spurring job growth, including some that have poured hundreds of millions of dollars into corporate incentive programs even while grappling with record deficits, according to a new report.
The report released Thursday by the Pew Center on the States found that no state regularly takes a hard look at the effectiveness of all of its tax breaks. Twenty-five states and Washington, D.C., do little if any evaluation, including Illinois, which is among the states facing major budget struggles.
Only 13 were found to be doing enough, the study found.
It's difficult to say just how much U.S. states spend combined on tax incentives, but they've become more common in the past decade, particularly since 2008 when the country sank into recession. Unemployment rose and the money available for state budgets shrank, yet researchers found the tax breaks states handed out may not have produced the desired effect.
"Given that states are rebuilding their budgets and economies in the wake of the Great Recession, these are mistakes states can't afford to make," Pew senior researcher Jeff Chapman said.
...
Among the glaring problems identified with incentive oversight was failing to provide information to state lawmakers who have to sign off on the programs, at least initially, Chapman said.
Therese McGuire, an economist at Northwestern University, said that with the right information lawmakers should be able to create focused incentives that at least increase the odds of a return on a state's investments, or to choose to provide nothing at all.
"I think it's possible from these examples for policymakers to make intelligent choices about whether or not to give tax incentives," McGuire said. "(And) you're talking to someone who has become sort of innately skeptical of tax incentives."
But University of Illinois economist Fred Giertz said that while the report is well-intentioned, it's often difficult to judge how well corporate tax breaks work.
"I'm not hopeful they'll have really precise results to measure job creation," he said.
Pew reviewed close to 600 documents for its report and interviewed more than 175 people, with every state participating, Chapman said.
...
Read more: http://www.nwitimes.com/news/national/report-few-states-effectively-track-tax-breaks/article_baa60396-ae06-5844-b189-2f5e5c269506.html#ixzz1rqN0EzaF
Most states are doing a poor job tracking whether their tax breaks for businesses are actually spurring job growth, including some that have poured hundreds of millions of dollars into corporate incentive programs even while grappling with record deficits, according to a new report.
The report released Thursday by the Pew Center on the States found that no state regularly takes a hard look at the effectiveness of all of its tax breaks. Twenty-five states and Washington, D.C., do little if any evaluation, including Illinois, which is among the states facing major budget struggles.
Only 13 were found to be doing enough, the study found.
It's difficult to say just how much U.S. states spend combined on tax incentives, but they've become more common in the past decade, particularly since 2008 when the country sank into recession. Unemployment rose and the money available for state budgets shrank, yet researchers found the tax breaks states handed out may not have produced the desired effect.
"Given that states are rebuilding their budgets and economies in the wake of the Great Recession, these are mistakes states can't afford to make," Pew senior researcher Jeff Chapman said.
...
Among the glaring problems identified with incentive oversight was failing to provide information to state lawmakers who have to sign off on the programs, at least initially, Chapman said.
Therese McGuire, an economist at Northwestern University, said that with the right information lawmakers should be able to create focused incentives that at least increase the odds of a return on a state's investments, or to choose to provide nothing at all.
"I think it's possible from these examples for policymakers to make intelligent choices about whether or not to give tax incentives," McGuire said. "(And) you're talking to someone who has become sort of innately skeptical of tax incentives."
But University of Illinois economist Fred Giertz said that while the report is well-intentioned, it's often difficult to judge how well corporate tax breaks work.
"I'm not hopeful they'll have really precise results to measure job creation," he said.
Pew reviewed close to 600 documents for its report and interviewed more than 175 people, with every state participating, Chapman said.
...
Read more: http://www.nwitimes.com/news/national/report-few-states-effectively-track-tax-breaks/article_baa60396-ae06-5844-b189-2f5e5c269506.html#ixzz1rqN0EzaF
Wednesday, April 11, 2012
Board Finds Evidence of Comparable Sales and Assessments Insufficient to Raise a Prima Facie Case
The Petitioners tried to rely on a comparison approach to
establish the value of the subject property by presenting evidence about the
assessed value of five purported comparables: the Seitz property (Exhibit 2),
the Weidenbenner property (Exhibit 3), the Hoffman property (Exhibit 4), the
Stenftenagel property (Exhibit 5), and the Hopf property (Exhibit 6).
Conclusory statements that properties are “similar” or “comparable” to one
another, however, are not sufficient for any meaningful analysis. Long, 821
N.E.2d at 470. To make a case, the comparison must explain the characteristics
of the subject property and how those characteristics compare to those of
purportedly comparable properties. It also must explain how any differences
between the properties affect their relative values. Id. at 470-71. The
Petitioners offered some data about the assessments of these other properties
with a little testimony about similarities and differences such as size and
location. But the totality of the case falls short of what would be required
for any meaningful comparative analysis or conclusion about what the market
value-in-use of the subject property is.
http://www.in.gov/ibtr/files/Buechlein_19-002-10-1-5-00026.pdf
Furthermore, simply comparing the assessment of the subject
property with a few other assessments does not prove that the assessed value of
the subject property must be changed. Westfield Golf Practice Center, LLC v.
Washington Twp. Assessor, 859 N.E.2d 396 (Ind. Tax Ct. 2007). The Tax Court
held that it is not enough for a taxpayer to show that its property is assessed
higher than other comparable properties. Instead, the taxpayer must present
probative evidence to show that the assessed value does not accurately reflect
market value-in-use. Here, the Petitioner offered no probative evidence that
the current assessment did not accurately reflect the market value-in use of
their property. The comparison with other assessments does not support any
conclusion about what a more accurate market value-in-use for the subject
property might be.
It is a “cardinal principle that each tax year stands on its
own.” Where a taxpayer challenges an assessment, the “resolution of that
challenge does not depend on how the property was previously assessed.” Barth,
Inc. v. State Bd. of Tax Comm’rs, 699 N.E.2d 800, 806 n.14 (Ind. Tax Ct.
1998). Therefore, how the assessment of the subject property changed from 2002
is not relevant to determining what an accurate market value-in-use is for the
subject property as of March 1, 2010. Similarly, a tax bill is a function of
several variables including assessed value, tax rates, exemptions, and deductions.
The amount of the Petitioners’ taxes and how much this amount may have
increased from prior years does not help to prove what an accurate assessed
value is.
http://www.in.gov/ibtr/files/Buechlein_19-002-10-1-5-00026.pdf
Automotive Robotics Offered $300,000 in Conditional Tax Credits
From the Indianapolis
Star:
Automotive Robotics Indiana Labs Inc. today announced it will invest $10 million in a new facility at the Purdue Research Park and create up to 30 jobs by next year.
http://www.indystar.com/apps/pbcs.dll/article?AID=2012204110355
Automotive Robotics Indiana Labs Inc. today announced it will invest $10 million in a new facility at the Purdue Research Park and create up to 30 jobs by next year.
The Illinois-based
company, which provides electronics, engineering design and manufacturing
services, will build a 50,000-square-foot facility on a 5-acre site. It will
house test cells and prototype build areas for engine testing.
The Indiana Economic
Development Corp. offered Automotive Robotics up to $300,000 in conditional tax
credits and up to $50,000 in training grants based on the job creation plans.
Additional incentives are being provided through the Tippecanoe County
Commissioners and the city of West Lafayette.http://www.indystar.com/apps/pbcs.dll/article?AID=2012204110355
Lake County Council Approves Loan
From the
Northwest Indiana Times:
This year just got millions of dollars more expensive for Lake County
taxpayers.
The Lake County Council gave its approval Tuesday to borrow $5 million to
repair crumbling rural roads.
…
The state's support of local roads has remained frozen for the last nine
years while the cost of paving materials has risen by 128 percent in the same
period, Malczewski said.
…
The council gave its third and final approval to borrow another $8 million
to resolve a number of lawsuits against the county, including $6.9 million to
pay former jail inmates and their lawyers to settle a 2-year-old suit alleging
crowded and unsanitary conditions within the jail's holding cells.
The council also transferred $2 million from a recent tax sale into a fund
to cover $1.6 million in year-end salaries and benefits for the 27th pay period
of 2012.
…
Fort Wayne Council Debates Use of State Windfall
From the Fort
Wayne News Sentinel:
Fort Wayne City Council
members seemed eager Tuesday to spend an $8 million-plus windfall resulting
from a state accounting blunder that shorted local governments by a total of
$206 million in taxes this year and in 2011.
A majority of council
members voiced support for putting the money toward street work, parks, police
equipment and other needs that went underfunded because of a lean tax revenues
and a flat city budget.
“It does appear $8.5
million, if that number is correct, would relieve some pressure on our city
budget,” said Councilman Geoff Paddock, D-5th.
When the error is
corrected, Allen County will receive about $15 million in local income taxes
that were never distributed by the state, with about $8.5 million going to the
city. The money includes county option income taxes and community
economic-development income taxes.
While Councilman Glynn
Hines, D-6th, called for a public hearing to get input on how to use the
windfall, most council members didn't lack for ideas. Council President Tom
Smith, R-1st, said the city should put $1 million into each council district
for neighborhood improvements.
Councilman Mitch Harper,
R-4th, noted that the city has fallen behind on $55 million worth of concrete
street repairs, and Councilman John Shoaff, D-at large, suggested using some of
the money to catch up on removing trees killed by the emerald ash borer.
http://www.news-sentinel.com/apps/pbcs.dll/article?AID=/20120411/NEWS/120419951
Tuesday, April 10, 2012
LaPorte Issues Provisional Tax Bills
From the LaPorte Herald-Angus:
La Porte County Treasurer Nancy Hawkins will be mailing the 2011-pay-2012 provisional tax bills on Friday.
This summer, two tax bills, 2008-pay-2009 and 2009-pay-2010 “will be bundled together in one bill,” Hawkins said, but each year will have its own column, one for 2008 and another for 2009. Those bills will arrive in August with payment dates of Sept. 18.
The county has not been current with tax bills since the 2006 reassessment but now, legislation written into Senate Bill 19 by State Rep. Tom Dermody, R-La Porte, and signed by the governor, could cost the county millions of dollars in fines if the county fails to meet deadlines.
Essentially, the county will be fined $1 million for each consecutive year the taxes are delayed. The money is to be given to the units of government for interest payments, as they must borrow money to cover expenses while waiting for the property tax distributions.
“Altogether, the county is at risk for $3 million,” Hawkins said.
Hawkins said she knows the situation is a hardship for taxpayers. Many people have been doing exactly what Indiana State Auditor Tim Berry suggested when he was in town to speak to area Republicans on March 24. Property owners have been putting away money to pay their taxes, Hawkins noted.
But it’s difficult to know how much to save.
In the 2007-pay-2008 bills, Hawkins said 60 percent of property owners found they owed more money when their reconciled bills arrived, even after they had paid the amount of the provisional bill.
“And 45 percent of them owed $1,000 or more,” she said.
...
http://heraldargus.com/articles/2012/04/05/news/local/doc4f7d01f406a61478093257.txt
La Porte County Treasurer Nancy Hawkins will be mailing the 2011-pay-2012 provisional tax bills on Friday.
This summer, two tax bills, 2008-pay-2009 and 2009-pay-2010 “will be bundled together in one bill,” Hawkins said, but each year will have its own column, one for 2008 and another for 2009. Those bills will arrive in August with payment dates of Sept. 18.
The county has not been current with tax bills since the 2006 reassessment but now, legislation written into Senate Bill 19 by State Rep. Tom Dermody, R-La Porte, and signed by the governor, could cost the county millions of dollars in fines if the county fails to meet deadlines.
Essentially, the county will be fined $1 million for each consecutive year the taxes are delayed. The money is to be given to the units of government for interest payments, as they must borrow money to cover expenses while waiting for the property tax distributions.
“Altogether, the county is at risk for $3 million,” Hawkins said.
Hawkins said she knows the situation is a hardship for taxpayers. Many people have been doing exactly what Indiana State Auditor Tim Berry suggested when he was in town to speak to area Republicans on March 24. Property owners have been putting away money to pay their taxes, Hawkins noted.
But it’s difficult to know how much to save.
In the 2007-pay-2008 bills, Hawkins said 60 percent of property owners found they owed more money when their reconciled bills arrived, even after they had paid the amount of the provisional bill.
“And 45 percent of them owed $1,000 or more,” she said.
...
http://heraldargus.com/articles/2012/04/05/news/local/doc4f7d01f406a61478093257.txt
Law Aimed at Speeding up Property Tax Billing in LaPorte Seeing Results
From the LaPorte Herald-Angus:
A new law aiming to speedup the property tax reconciliation process in La Porte County is already seeing some results in the county, county commissioner Ken Layton said.
The law, an amendment to Senate Enrolled Act (SEA) 19, came into effect last week when it was signed by Gov. Mitch Daniels.
Developed by Rep. Tom Dermody, R-La Porte, the law is designed to encourage county officials to fix the property tax issue in a timely manner or face penalties.
Dermody said the county won’t have to pay a penalty back to local units if property tax bills are sent out by Jan. 15, 2013.
“I feel good for the taxpayer of La Porte County and the local units of government,” Dermody said in a phone interview. “Hopefully this will be another incentive to get caught up and for businesses coming to La Porte to have accurate tax info. People want us creating jobs.”
If the deadline isn’t met, SEA 19 will require the county to pay $1 million to local units of government that took out loans for late and uncollected property taxes. If the bills are still not sent out by Feb. 28, the county will have to pay $4 million over a period of four years.
Layton said he is supportive of the bill, although he doesn’t agree with all its provisions.
“It has started things moving in the courthouse in an attempt to comply with the law that I haven’t seen in years,” he said. “I’m not in favor of the penalty phase. It’s asking the county to come up with a million dollars that I don’t know quite frankly how it’s going to come up with. We haven’t got any tax statements either.”
He said county commissioners (along with the county auditor, treasurer and assessor) met twice already with representatives from the state auditor’s office, the department of local government finance, the state board of accounts, the settlement deputy for the state of Indiana and the vendor of the county’s computer tax program.
A timeline to complete the process before the Jan. 13 deadline was developed as a result of the meeting.
Layton said he doesn’t expect the county to pay any of the penalties.
...
The new law will also give the county council authority to allow taxpayers six months or more to send in their payments or set up a payment plan. Additionally, the county will be prohibited from placing a property on tax sale for at least one year after the payment deadline.
According to a press release from Dermody, the council will have the option of granting a tax credit of up to 2 percent of delayed property taxes if the taxes are paid within 30 days. To make payments easier, the county treasurer will be required to accommodate individuals using a debit or credit card.
Another measure in the legislation allows the county commissioners to remove the treasurer, auditor and assessor from the property tax collection process and appoint a ‘special master’ to handle the duties. The commissioners will directly oversee the person responsible for property tax collection.
http://heraldargus.com/articles/2012/04/01/news/local/doc4f765a6b1f4bd059128132.txt
A new law aiming to speedup the property tax reconciliation process in La Porte County is already seeing some results in the county, county commissioner Ken Layton said.
The law, an amendment to Senate Enrolled Act (SEA) 19, came into effect last week when it was signed by Gov. Mitch Daniels.
Developed by Rep. Tom Dermody, R-La Porte, the law is designed to encourage county officials to fix the property tax issue in a timely manner or face penalties.
Dermody said the county won’t have to pay a penalty back to local units if property tax bills are sent out by Jan. 15, 2013.
“I feel good for the taxpayer of La Porte County and the local units of government,” Dermody said in a phone interview. “Hopefully this will be another incentive to get caught up and for businesses coming to La Porte to have accurate tax info. People want us creating jobs.”
If the deadline isn’t met, SEA 19 will require the county to pay $1 million to local units of government that took out loans for late and uncollected property taxes. If the bills are still not sent out by Feb. 28, the county will have to pay $4 million over a period of four years.
Layton said he is supportive of the bill, although he doesn’t agree with all its provisions.
“It has started things moving in the courthouse in an attempt to comply with the law that I haven’t seen in years,” he said. “I’m not in favor of the penalty phase. It’s asking the county to come up with a million dollars that I don’t know quite frankly how it’s going to come up with. We haven’t got any tax statements either.”
He said county commissioners (along with the county auditor, treasurer and assessor) met twice already with representatives from the state auditor’s office, the department of local government finance, the state board of accounts, the settlement deputy for the state of Indiana and the vendor of the county’s computer tax program.
A timeline to complete the process before the Jan. 13 deadline was developed as a result of the meeting.
Layton said he doesn’t expect the county to pay any of the penalties.
...
The new law will also give the county council authority to allow taxpayers six months or more to send in their payments or set up a payment plan. Additionally, the county will be prohibited from placing a property on tax sale for at least one year after the payment deadline.
According to a press release from Dermody, the council will have the option of granting a tax credit of up to 2 percent of delayed property taxes if the taxes are paid within 30 days. To make payments easier, the county treasurer will be required to accommodate individuals using a debit or credit card.
Another measure in the legislation allows the county commissioners to remove the treasurer, auditor and assessor from the property tax collection process and appoint a ‘special master’ to handle the duties. The commissioners will directly oversee the person responsible for property tax collection.
http://heraldargus.com/articles/2012/04/01/news/local/doc4f765a6b1f4bd059128132.txt
Elkhart County Property Tax Bills Available On-line
From the Elkhart Truth:
The county launched a new feature Monday morning that allows taxpayers to view and pay their bills online at www.invoicecloud.com/elkhart. The link can also be accessed on the county treasurer’s website at www.elkhartcountyindiana.com/departments/treasurer, which has more details about paying taxes online.
http://www.etruth.com/article/20120410/NEWS01/704109933
The county launched a new feature Monday morning that allows taxpayers to view and pay their bills online at www.invoicecloud.com/elkhart. The link can also be accessed on the county treasurer’s website at www.elkhartcountyindiana.com/departments/treasurer, which has more details about paying taxes online.
http://www.etruth.com/article/20120410/NEWS01/704109933
Noblesville Approves 10 Year Tax Abatement for SMC Corp.
From the Indianapolis Business Journal:
SMC Corp. of America plans to spend $19 million to expand its North American headquarters in Noblesville, making room for an additional 163 employees by 2017, the company announced Tuesday.
SMC, which develops and makes pneumatic automation equipment, said it will expand its current facility by 600,000 square feet, to almost 1.5 million square feet. Work is set to begin this month and be finished by September. The company employs more than 600 workers in Noblesville.
The city of Noblesville has approved 10-year phase-in tax abatement for the expansion.
...
http://www.ibj.com/smc-plans-noblesville-expansion--163-jobs/PARAMS/article/33751
SMC Corp. of America plans to spend $19 million to expand its North American headquarters in Noblesville, making room for an additional 163 employees by 2017, the company announced Tuesday.
SMC, which develops and makes pneumatic automation equipment, said it will expand its current facility by 600,000 square feet, to almost 1.5 million square feet. Work is set to begin this month and be finished by September. The company employs more than 600 workers in Noblesville.
The city of Noblesville has approved 10-year phase-in tax abatement for the expansion.
...
http://www.ibj.com/smc-plans-noblesville-expansion--163-jobs/PARAMS/article/33751
Duneland Schools Budget Cut by an Additional $800,000
From the Chesterton Tribune:
...
Assistant Superintendent Dave Pruis presented the Duneland School Board with figures from the certified 2012 budget order released on Feb. 13 and compared it to what was estimated in September’s advertised budget.
The state will hand out $35,682,954, to Duneland’s general fund – the fund which pays for staff salaries and programs -- more than $800,000 less than what was originally projected in the advertised budget ($36,500,000). Duneland Schools Superintendent Dirk Baer said the state’s new funding formula collected by state sales tax has reduced the general fund by more than $4.5 million.
Pruis said the tuition support distribution from the state based on the average daily membership for this year will be $4,939 per student, a decline from the $4,970 given for each student in 2011, $5,078 in 2010 and $5,228 seen in 2009.
Overall, the school corporation will see a $3.5 million difference between the final figures and what was anticipated in all its funds with its total budget of $58,797,754 compared to the appropriated budget of $62,304,939.
“This is where we are at this particular point in time. It is what it is,” said Pruis.
For this year in funds outside the general fund: Debt Service- $8,793,490; School Pension Debt - $1,598,145; Capital Projects - $8,220,155; Transportation - $3,815,690; Bus Replacement - $687,320. The state reports the total levy to be $20,863,479.
The Capital Projects fund and the Bus Replacement fund, which are generated by property taxes, saw reductions of $2.4 million and $300,000 respectively.
The tax rate for the school district failed once again to meet the levels seen in 2008 when the state legislature initiated the tax rate caps statewide. For 2012, the state budget order rendered a tax rate of .8632, which is .0080 higher than last year but .60 less than the 2008 tax rate, Pruis said.
The district’s total Assessed Value is estimated at $2,416,992,465 this year which is $4.6 million less than for 2011.
...
Baer said “the real issue now” is to restore money to the general fund. The board approved a referendum at their Feb. 13 meeting that, if passed, would offset the shortfalls by restoring the $4.5 million in state cuts. Voters in the May 8 referendum will be asked whether they approve a tax increase of 22 cents per $100 on their assessed property value.
...
As Baer mentioned previously, to live within the means of the state’s appropriations, the school corporation would see its teaching staff reduced by 20 positions, about 30 percent of clerical staff and in-school aides would be terminated as would 35 percent of co-curricular staff.
...
http://www.chestertontribune.com/Education%20Duneland%20Schools/410122%20state_hits_duneland_schools_with.htm
...
Assistant Superintendent Dave Pruis presented the Duneland School Board with figures from the certified 2012 budget order released on Feb. 13 and compared it to what was estimated in September’s advertised budget.
The state will hand out $35,682,954, to Duneland’s general fund – the fund which pays for staff salaries and programs -- more than $800,000 less than what was originally projected in the advertised budget ($36,500,000). Duneland Schools Superintendent Dirk Baer said the state’s new funding formula collected by state sales tax has reduced the general fund by more than $4.5 million.
Pruis said the tuition support distribution from the state based on the average daily membership for this year will be $4,939 per student, a decline from the $4,970 given for each student in 2011, $5,078 in 2010 and $5,228 seen in 2009.
Overall, the school corporation will see a $3.5 million difference between the final figures and what was anticipated in all its funds with its total budget of $58,797,754 compared to the appropriated budget of $62,304,939.
“This is where we are at this particular point in time. It is what it is,” said Pruis.
For this year in funds outside the general fund: Debt Service- $8,793,490; School Pension Debt - $1,598,145; Capital Projects - $8,220,155; Transportation - $3,815,690; Bus Replacement - $687,320. The state reports the total levy to be $20,863,479.
The Capital Projects fund and the Bus Replacement fund, which are generated by property taxes, saw reductions of $2.4 million and $300,000 respectively.
The tax rate for the school district failed once again to meet the levels seen in 2008 when the state legislature initiated the tax rate caps statewide. For 2012, the state budget order rendered a tax rate of .8632, which is .0080 higher than last year but .60 less than the 2008 tax rate, Pruis said.
The district’s total Assessed Value is estimated at $2,416,992,465 this year which is $4.6 million less than for 2011.
...
Baer said “the real issue now” is to restore money to the general fund. The board approved a referendum at their Feb. 13 meeting that, if passed, would offset the shortfalls by restoring the $4.5 million in state cuts. Voters in the May 8 referendum will be asked whether they approve a tax increase of 22 cents per $100 on their assessed property value.
...
As Baer mentioned previously, to live within the means of the state’s appropriations, the school corporation would see its teaching staff reduced by 20 positions, about 30 percent of clerical staff and in-school aides would be terminated as would 35 percent of co-curricular staff.
...
http://www.chestertontribune.com/Education%20Duneland%20Schools/410122%20state_hits_duneland_schools_with.htm
Tax Caps "Devastating" to Local Governments
From the Northwest Indiana Times:
Property tax caps have become a double–edge sword that create a standardized tax structure but have been "devastating" to Indiana's municipalities, according to the head of the Indiana Association of Cities and Towns.
Matthew C. Greller spoke at the Gary Chamber of Commerce monthly meeting on Monday. The IACT executive director and CEO said Indiana municipalities have already lost out of $180 million they would have received before voters approved adding the property tax caps to the Indiana Constitution three years ago.
"It's easy to say to cities and towns to tighten your belt," said Greller of what he called the No. 1 challenge faced Indiana cities and towns. "We haven't thought through the long–term effects (of tax caps)."
"More than half of every dollar municipalities receive goes for public safety. For example, it's extremely expensive to outfit a firefighter. But without public safety, we have nothing," he said.
The problem is that there is little left over "to create other programs" including economic development efforts, Greller said. "There is complete erosion of parks and quality of life features."
Infrastructure is also falling behind with more than 50 percent of municipalities reducing street and road maintenance. In some rural counties, paved roads are being returned to gravel because it's too expensive to repave them, he said. "This is 19th Century or early 20th Century level services."
...
Read more: http://www.nwitimes.com/business/local/property-tax-caps-devastating-to-indiana-municipalities/article_fe30f311-ec25-5358-bff5-1730a258b6d0.html#ixzz1rg3BNVFy
Property tax caps have become a double–edge sword that create a standardized tax structure but have been "devastating" to Indiana's municipalities, according to the head of the Indiana Association of Cities and Towns.
Matthew C. Greller spoke at the Gary Chamber of Commerce monthly meeting on Monday. The IACT executive director and CEO said Indiana municipalities have already lost out of $180 million they would have received before voters approved adding the property tax caps to the Indiana Constitution three years ago.
"It's easy to say to cities and towns to tighten your belt," said Greller of what he called the No. 1 challenge faced Indiana cities and towns. "We haven't thought through the long–term effects (of tax caps)."
"More than half of every dollar municipalities receive goes for public safety. For example, it's extremely expensive to outfit a firefighter. But without public safety, we have nothing," he said.
The problem is that there is little left over "to create other programs" including economic development efforts, Greller said. "There is complete erosion of parks and quality of life features."
Infrastructure is also falling behind with more than 50 percent of municipalities reducing street and road maintenance. In some rural counties, paved roads are being returned to gravel because it's too expensive to repave them, he said. "This is 19th Century or early 20th Century level services."
...
Read more: http://www.nwitimes.com/business/local/property-tax-caps-devastating-to-indiana-municipalities/article_fe30f311-ec25-5358-bff5-1730a258b6d0.html#ixzz1rg3BNVFy
West Lafayette TIF District Expanding
From the Lafayette Journal & Courier:
West Lafayette's tax increment finance district is on the verge of flowing well beyond the Levee area where it originated. Its size will triple.
The city council last Monday approved the expanded TIF district. At the redevelopment commission's 8:30 a.m. April 18 meeting, the proposal will receive a public hearing and final approval.
Revenue from the expanded TIF district will generate opportunities to address long-standing problems.
...
The proposed expanded TIF stretches along the Northwestern Avenue corridor north to Lindberg Road. It includes the area commonly called the island, between Russell and University streets, bordered by Stadium Avenue on the north and Indiana 26 to the south. That area is being eyed by Purdue University for expansion, several council members said.
The proposed expanded TIF also includes the New Chauncey neighborhood. However, homeowners do not have to worry. TIF districts have no impact on residential property owners' taxes, said Chandler Poole, West Lafayette's economic development director.
...
Monday, April 9, 2012
Board Finds Cessation of Farming Activity not "Change in Use" Sufficient to Trigger Loss of Developer's Discount
The Petitioner contends the
property should never have been reclassified in 2002 from agricultural acreage
to commercial acreage.
…
The Respondent contends that
the subject parcels were reassessed from agricultural to commercial acreage
during the March 1, 2002, reassessment because there was a change in use. Assessor’s
Response at 2. According to the Respondent, Indiana Code § 6-1.1-4-13
allows for land to be assessed as agricultural land only when it is devoted to
agricultural use. Id. The parcels have not been devoted to agricultural
purpose since they were conveyed to the developers in the 1990s and thus, the
Respondent argues, the land has not been entitled to the agricultural land rate
for years. Id. at 3.
The Respondent’s argument has
some merit. The Board has frequently issued decisions determining that land was
not entitled to be assessed as agricultural land when the property was not “devoted
to agriculture.” See e.g., Leavesley v. Boone County Assessor, Petition
No. 06-019-08-1-5-00031, (Aug. 30, 2010) (“Here the Petitioners only argued
that their land has 50% canopy cover. They offered no evidence to show that the
land was used for any agricultural purpose on March 1, 2008, much less that it
was ‘devoted’ to agriculture. According to Mr. Leavesley, the property is only
used by his family to access the creek and for nature walks. Thus, the
Petitioners failed to sufficiently show that the property is devoted to an ‘agricultural
use.’”); and Neukum v. Hall Township Assessor, Petition No.
19-006-06-1-5-00019 (August 28, 2008) (“Here, the Petitioner admitted that,
while he arranged to have hay cut, it was not his intention in 2006 to grow hay
on the property. The Petitioner planted no crop. He pastured no animals. He
simply chose to have the existing vegetation cut on the parcel. This falls well
below the burden to show that the property is ‘devoted’ to agricultural use.”)
However, the Board has also
noted in many circumstances that specific legislation trumps general assessment
principles. See e.g., JDPHD Investment Group v. Monroe County Assessor, Petition
No. 53-005-07-1-4-00083 (Sept. 13, 2010) (“This is not a case where an assessor’s
valuation of a property according to the Assessment Guidelines is presumed to
be accurate. And this is not a case where an assessor has discretion to choose
among the cost method, the comparable sales method, the income capitalization
method, or other generally accepted appraisal principles to determine the
assessed value of the subject property because Ind. Code § 6-1.1-4-39(a)
specifies how the assessed value must be determined.”)
The Tax Court in Aboite determined
that the developer’s discount statute is “designed to encourage developers to
buy farmland, divide it into lots, and resell the lots.” Aboite Corp. v.
State Board of Tax Commissioners, 762 N.E.2d 254, 257 (Ind. Tax Ct.2001).
While the Tax Court there determined that the property at issue had changed in
use, it was the construction of a shopping center on the unsold lot; rather
than the cessation of farming activity which the Court cited as the change in
use. 762 N.E.2d at 258. In fact, the Court noted, “assuming arguendo that
Aboite merely decided to ‘hold off’ in selling its vacant lot until a later
date, the intent of the exception would prevail, and the land would continue to
be assessed on its original agricultural acreage basis.” Id. However,
“[b]ecause Aboite converted the vacant lot into an income-producing property,”
the Court found “the intent of the exception is frustrated.” Id.
Here,
the Petitioner did not sell its vacant lots; rather the lots remained vacant
and did not change use. Thus, the Board finds that the Petitioner’s properties
should have continued with their agricultural assessments.
http://www.in.gov/ibtr/files/Allisonville_Road_Development_29-006-08-1-4-00066_and_67.pdf
Revenue Finds Shipping Pallets Not Qualified for "Nonreturnable Containers" Exemption
Taxpayer, a commercial printing company, does business in
Indiana. Taxpayer rents or leases certain shipping pallets from a vendor
("Vendor").
…
Taxpayer argued that its leases/uses of
the pallets qualified for the exemption of "nonreturnable containers"
under IC § 6-2.5-5-9(d) and 45 IAC 2.2-5-16(c)(1).
Taxpayer claimed that "if a company purchases pallets and uses them to
ship its products to consignees (with no obligation by the customer to return
them), the pallet is a nonreturnable container, and the company is exempt from
sales tax on the purchase of the pallets."
Taxpayer derived its argument based on one sentence in
Brambles decision stating that "the resolution of the issue hinges on to
whom the pallets must be returned." (Emphasis on original in
Taxpayer's protest letter). Taxpayer argued that Brambles found the
manufacturers' use of the pallets did not qualify for the exemption of
"nonreturnable containers" because the manufacturers' customers had
the "written contractual obligation" of returning the pallets to the possessor/owner
of the pallets, Chep. Taxpayer thus argued that if there is no written
contractual obligation to return the pallets, Brambles is not applicable.
Specifically, Taxpayer argued that, unlike the taxpayer in Brambles, it did not
have any written agreement with Vendor, which obligated Taxpayer to return the
pallets to Vendor. Although Vendor advertised its pallets as
"returnable" and attempted to retrieve its pallets either from
Taxpayer or Taxpayer's customers, Taxpayer asserted that Vendor "did so on
its own initiative." To support its protest, Taxpayer submitted additional
documentation, including a copy of affidavit from Vendor and sample copies of
its "Purchase Orders" of the pallets and the invoices to its
customers.
Taxpayer is mistaken. Neither the statute/regulation nor the
Brambles court imposes such requirement of "written contractual
obligation" in order to find the pallets are "returnable."
...
In this instance, Vendor advertises itself as "the
leader in providing plastic returnable pallets to commercial printers."
(Emphasis added). Taxpayer is one of the commercial printers who have leased
the "returnable pallets" from Vendor. Vendor's advertising also emphasizes
its well-coordinated, nationwide pallet return program. Thus, the pallets were
customarily returned to Vendor through its well established nationwide
returnable/reusable program. Taxpayer may assert that it was not obligated to
return the pallets; however, like Chep's pallets in Brambles, the pallets at
issue here were customarily "passed back to an earlier possessor,"
which in this instance was Vendor. Pursuant to the Brambles decision, "it
is enough that the pallets are "pass[ed] back to an earlier
possessor" to conclude that "the pallets are returnable
containers." Therefore, Taxpayer's lease/use of Vendor's returnable
pallets, like the manufacturers' lease/use of the Chep's pallets, did not
qualify for the nonreturnable container exemption.
...
Thus, Taxpayer's lease and use of Vendor's returnable pallets were subject to
sales/use tax pursuant to the above mentioned statute, regulation, and case
law. Since Taxpayer did not pay sales tax at the time of the transactions, use
tax is properly imposed.
Crown Point Considers Tax Abatement Renewals
From the Northwest Indiana Times:
The Crown Point City Council is expected to consider on Wednesday the annual renewal of tax abatement for several businesses in the city.
A total of 37 requests for renewal were reviewed in March by the Human Resources and Economic Development Committee. The committee recommended approval of most of the requests, except for a handful seeking deferrals.
...
Read more: http://www.nwitimes.com/news/local/lake/crown-point/tax-abatement-renewals-set-for-consideration-by-crown-point-officials/article_39846887-53d0-5ef5-b27b-de0e049e7b1c.html#ixzz1ra1wDarU
The Crown Point City Council is expected to consider on Wednesday the annual renewal of tax abatement for several businesses in the city.
A total of 37 requests for renewal were reviewed in March by the Human Resources and Economic Development Committee. The committee recommended approval of most of the requests, except for a handful seeking deferrals.
...
Read more: http://www.nwitimes.com/news/local/lake/crown-point/tax-abatement-renewals-set-for-consideration-by-crown-point-officials/article_39846887-53d0-5ef5-b27b-de0e049e7b1c.html#ixzz1ra1wDarU
Libraries see Cost Benefits from Mergers
AP story reported in the Northwest Indiana Times:
A growing number of Indiana's smaller libraries are teaming up to share books and receive better deals as they face dwindling tax dollars. Some libraries are even merging to keep from closing their doors.
...
Consolidations can have financial benefits, such as by reducing technology and administrative costs, said deputy state librarian Jim Corridan.
He said merged libraries can cost less because they often don't need two of everything, including administrators, subscriptions to the same databases or licenses for the same software.
More than 150 of the state's 237 library districts have agreements to share books with each other.
And nearly 100 districts have joined a consortium that allows the residents to check out more than 6 million items from libraries throughout the state, he said. Others have teamed up to get better deals from publishers on e-books and digital audio books.
"We've seen a growing trend toward collaboration," Corridan said.
All three of the libraries in Noble County in northeast Indiana already have book-sharing agreements, allowing residents to check out books, regardless of the district they live in. Those districts explored a merger in 2010 but decided against it after residents expressed concerns about losing representation on the library board and a potential tax increase for some property owners.
The two Indiana library district mergers in the past four years haven't resulted in overall budget reductions, but both mergers involved smaller libraries without administrative overhead, Corridan said.
In northeastern Indiana, the Decatur and Geneva libraries merged into Adams County Public Library in 2008 and have expanded services, said director Kelly Ehinger. She said they were able to put more money toward buying books because of savings in bulk purchasing, database subscription costs and cataloging.
...
Read more: http://www.nwitimes.com/news/state-and-regional/indiana/small-ind-libraries-team-up-share-to-stay-open/article_93628a56-4481-5f17-b01a-3d0ddaaedb77.html#ixzz1ra0yDqFt
A growing number of Indiana's smaller libraries are teaming up to share books and receive better deals as they face dwindling tax dollars. Some libraries are even merging to keep from closing their doors.
...
Consolidations can have financial benefits, such as by reducing technology and administrative costs, said deputy state librarian Jim Corridan.
He said merged libraries can cost less because they often don't need two of everything, including administrators, subscriptions to the same databases or licenses for the same software.
More than 150 of the state's 237 library districts have agreements to share books with each other.
And nearly 100 districts have joined a consortium that allows the residents to check out more than 6 million items from libraries throughout the state, he said. Others have teamed up to get better deals from publishers on e-books and digital audio books.
"We've seen a growing trend toward collaboration," Corridan said.
All three of the libraries in Noble County in northeast Indiana already have book-sharing agreements, allowing residents to check out books, regardless of the district they live in. Those districts explored a merger in 2010 but decided against it after residents expressed concerns about losing representation on the library board and a potential tax increase for some property owners.
The two Indiana library district mergers in the past four years haven't resulted in overall budget reductions, but both mergers involved smaller libraries without administrative overhead, Corridan said.
In northeastern Indiana, the Decatur and Geneva libraries merged into Adams County Public Library in 2008 and have expanded services, said director Kelly Ehinger. She said they were able to put more money toward buying books because of savings in bulk purchasing, database subscription costs and cataloging.
...
Read more: http://www.nwitimes.com/news/state-and-regional/indiana/small-ind-libraries-team-up-share-to-stay-open/article_93628a56-4481-5f17-b01a-3d0ddaaedb77.html#ixzz1ra0yDqFt
Property Tax Caps Leave Homeowner-Dependent School Districts Struggling
AP story reported in the Fort Wayne News Sentinel:
Indiana's three-year-old property tax caps have left some once-wealthy, homeowner-dependent school districts struggling while others that have courted businesses and industry have become rich.
Household incomes in Zionsville are more than twice as high as those in Lebanon, but Zionsville's schools are strapped for cash while Lebanon is preparing to spend $40 million to expand and renovate its high school, the Indianapolis Business Journal reports.
The two districts' financial outlooks contrast sharply from where they were in early 2007. Back then, Zionsville was growing by using its high-quality schools to attract high-end residents who built high-end homes. Lebanon's enrollment was stagnant through the 1990s and grew only slightly in the 2000s, while its spending per student remained below state averages.
...
The Legislature "changed the game" in 2008, said Dax Norton, a Zionsville resident and executive director of the Boone Economic Development Corp., based in Lebanon.
"The General Assembly basically said, 'If you want to continue to survive, if you want to continue to innovate, you're going to have to play the economic development game,' " he said.
That's what Lebanon had done over the past 20 years, taking action to replace declining manufacturing employment with logistics businesses. Tenants in the Lebanon Business Park, which opened in 1994, now account for more than 10 percent of the schools' tax base. Lebanon schools also stand to gain as new businesses like Amazon and Medco Health Solutions begin to produce tax revenue.
Meanwhile, Zionsville school officials are asking voters in a May 8 referendum to approve a $4.7 million annual property tax increase. Without it, they say, 10 to 15 teachers will be laid off, in addition to 16 who lost their jobs after a previous referendum failed.
By contrast, Lebanon voters approved a 2010 referendum that allowed local schools to sell $40 million in bonds to finance an expansion and renovation of the high school.
...
http://www.news-sentinel.com/apps/pbcs.dll/article?AID=/20120409/NEWS/120409593
Indiana's three-year-old property tax caps have left some once-wealthy, homeowner-dependent school districts struggling while others that have courted businesses and industry have become rich.
Household incomes in Zionsville are more than twice as high as those in Lebanon, but Zionsville's schools are strapped for cash while Lebanon is preparing to spend $40 million to expand and renovate its high school, the Indianapolis Business Journal reports.
The two districts' financial outlooks contrast sharply from where they were in early 2007. Back then, Zionsville was growing by using its high-quality schools to attract high-end residents who built high-end homes. Lebanon's enrollment was stagnant through the 1990s and grew only slightly in the 2000s, while its spending per student remained below state averages.
...
The Legislature "changed the game" in 2008, said Dax Norton, a Zionsville resident and executive director of the Boone Economic Development Corp., based in Lebanon.
"The General Assembly basically said, 'If you want to continue to survive, if you want to continue to innovate, you're going to have to play the economic development game,' " he said.
That's what Lebanon had done over the past 20 years, taking action to replace declining manufacturing employment with logistics businesses. Tenants in the Lebanon Business Park, which opened in 1994, now account for more than 10 percent of the schools' tax base. Lebanon schools also stand to gain as new businesses like Amazon and Medco Health Solutions begin to produce tax revenue.
Meanwhile, Zionsville school officials are asking voters in a May 8 referendum to approve a $4.7 million annual property tax increase. Without it, they say, 10 to 15 teachers will be laid off, in addition to 16 who lost their jobs after a previous referendum failed.
By contrast, Lebanon voters approved a 2010 referendum that allowed local schools to sell $40 million in bonds to finance an expansion and renovation of the high school.
...
http://www.news-sentinel.com/apps/pbcs.dll/article?AID=/20120409/NEWS/120409593
Sunday, April 8, 2012
Newton County to Mail Property Tax Bills Monday
From the Lafayette Journal & Courier:
The first installment for Newton County taxes is due May 10, said county treasurer Rosalie Mathis. The second installment is due Nov. 13.
Tax statements will be mailed Monday.
Payments can be made at the treasurer's office, a local bank or by mail. Use your tax statement when making a payment.
The treasurer's office is open from 8 a.m. to 4 p.m. local time, Monday through Friday. The office also will be open from 8 a.m. to noon local time on Saturday, May 5.
The courthouse will be closed Tuesday, May 8, for the primary election.
http://www.jconline.com/apps/pbcs.dll/article?AID=2012204070314
The first installment for Newton County taxes is due May 10, said county treasurer Rosalie Mathis. The second installment is due Nov. 13.
Tax statements will be mailed Monday.
Payments can be made at the treasurer's office, a local bank or by mail. Use your tax statement when making a payment.
The treasurer's office is open from 8 a.m. to 4 p.m. local time, Monday through Friday. The office also will be open from 8 a.m. to noon local time on Saturday, May 5.
The courthouse will be closed Tuesday, May 8, for the primary election.
http://www.jconline.com/apps/pbcs.dll/article?AID=2012204070314
Terre Haute Tribune-Star Editorial Argues "Hoosiers have Reason to Lack Confidence in State"
It is quite a good thing that Indiana’s local governments and school boards are receiving unexpected money from the state. It is quite a bad thing that the influx of money — which on Thursday rose to $526 million in total within the last four months — comes because of incompetence in the state Department of Revenue.
In the latest case, as reported on today’s front page, the state has failed to distribute to local government some $206 million it collected in county option income taxes. That announcement came even as the state was beginning to send out that money, posthaste.
Still fresh in memory, in December the state discovered $320 million it didn’t know it had. About one-fourth of that found money is being used to fund all-day kindergarten throughout the state next year — which is a very good thing, although there is still worry about unstable future funding.
The latest mistake is being blamed on a computer programming error, but the immediate departure of two senior managers in the Department of Revenue and the pending resignation of the department’s commissioner suggest that human error is involved in not discovering the programming error earlier, or preventing it at all. The people of Indiana have every right to expect that the money they are taxed for governmental services be properly accounted for and paid out — no matter the computer software being used.
For Vigo County, Thursday’s distribution of monies means $5.1 million (not including interest) coming here for redistribution within the county. Much of that money is for underpayments already owed the county. The rest is money it would have been underpaid through the end of 2012 had the error not been discovered. Our other “home” counties — Clay, Parke, Vermillion, Sullivan and Greene — will receive lesser but significant amounts.
All levels of local government need this money — which is truly county money and not state money — to deal with the dramatic cost-cutting they have encountered in recent years. One can only imagine the gnashing of teeth that the underestimation and under-distribution of these funds have caused county, city and town budget minders. Also consider the jobs cuts, projects delayed and unnecessary interest the state is paying the counties for these mistakes.
As these things go, the mistake is already politicized in a few short hours. Republican leaders Brian Bosma and David Long issued a businesslike statement calling for transparency and bipartisan support for a thorough, independent investigation. That high ground, of course, is something the party in power can take. By contrast, in a laughable, overly political statement, Democrats Pat Bauer and Vi Simpson (the latter of whom we thought knew better) took a we-told-you-so stance, noting they had asked for an outside audit when the $320 million was “found” last year. (Sample laugh line: “Perhaps they [Republicans] can try and explain this latest mistake away by saying ‘oops’ and comparing it to finding millions of dollars stuck in the cushions of a couch, just as they did last year.”)
Hubris aside, the serious part of that statement is that the Daniels administration can’t just say “oops” and move on. And it hasn’t. Instead, it has ordered an immediate release of the funds to counties and is looking for outside auditors. Still, $526 million in revenue errors gives Hoosiers little confidence that the next steps will be much more accurate.
The state has been ever ready in recent years to give out grades to local schools for their performances and test scores. For this debacle, the state administration deserves an F in accounting.
http://tribstar.com/editorials/x1224373821/TRIBUNE-STAR-EDITORIAL-Another-debacle-in-budgeting
In the latest case, as reported on today’s front page, the state has failed to distribute to local government some $206 million it collected in county option income taxes. That announcement came even as the state was beginning to send out that money, posthaste.
Still fresh in memory, in December the state discovered $320 million it didn’t know it had. About one-fourth of that found money is being used to fund all-day kindergarten throughout the state next year — which is a very good thing, although there is still worry about unstable future funding.
The latest mistake is being blamed on a computer programming error, but the immediate departure of two senior managers in the Department of Revenue and the pending resignation of the department’s commissioner suggest that human error is involved in not discovering the programming error earlier, or preventing it at all. The people of Indiana have every right to expect that the money they are taxed for governmental services be properly accounted for and paid out — no matter the computer software being used.
For Vigo County, Thursday’s distribution of monies means $5.1 million (not including interest) coming here for redistribution within the county. Much of that money is for underpayments already owed the county. The rest is money it would have been underpaid through the end of 2012 had the error not been discovered. Our other “home” counties — Clay, Parke, Vermillion, Sullivan and Greene — will receive lesser but significant amounts.
All levels of local government need this money — which is truly county money and not state money — to deal with the dramatic cost-cutting they have encountered in recent years. One can only imagine the gnashing of teeth that the underestimation and under-distribution of these funds have caused county, city and town budget minders. Also consider the jobs cuts, projects delayed and unnecessary interest the state is paying the counties for these mistakes.
As these things go, the mistake is already politicized in a few short hours. Republican leaders Brian Bosma and David Long issued a businesslike statement calling for transparency and bipartisan support for a thorough, independent investigation. That high ground, of course, is something the party in power can take. By contrast, in a laughable, overly political statement, Democrats Pat Bauer and Vi Simpson (the latter of whom we thought knew better) took a we-told-you-so stance, noting they had asked for an outside audit when the $320 million was “found” last year. (Sample laugh line: “Perhaps they [Republicans] can try and explain this latest mistake away by saying ‘oops’ and comparing it to finding millions of dollars stuck in the cushions of a couch, just as they did last year.”)
Hubris aside, the serious part of that statement is that the Daniels administration can’t just say “oops” and move on. And it hasn’t. Instead, it has ordered an immediate release of the funds to counties and is looking for outside auditors. Still, $526 million in revenue errors gives Hoosiers little confidence that the next steps will be much more accurate.
The state has been ever ready in recent years to give out grades to local schools for their performances and test scores. For this debacle, the state administration deserves an F in accounting.
http://tribstar.com/editorials/x1224373821/TRIBUNE-STAR-EDITORIAL-Another-debacle-in-budgeting
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