Indiana’s property tax earthquake is about to strike Marion County businesses. Thanks to a countywide reassessment, the assessed value of the county’s commercial and industrial properties soon will soar 20 percent to 30 percent, according to Marion County Assessor Greg Bowes, who has reviewed the soon-to-be-released data.
The data suggests that commercial property owners will pick up a greater share of the county’s property-tax tab, though how much tax bills will increase is not yet clear. That will hinge, in part, on future government spending levels and on what reforms the General Assembly passes this session.
But experts say the impact could be dire, accelerating the exodus of businesses from Marion County into suburban counties.
“That’s well beyond the threshold where businesses rethink their relocation decisions,” said Michael Hicks, director of Ball State University’s Bureau of Business Research. “Especially for those businesses that are footloose and can cancel a lease and move outside the county.”
According to the economic development group Indy Partnership, Marion County already has the highest taxes on commercial and industrial properties in the Indianapolis area. Owners of a Marion County building assessed at $1 million currently pay $52,800 in property tax annually. That’s $25,600 more than they’d pay for the same building a few miles southwest in Morgan County.
The reassessment will increase that disparity when the Marion County building’s assessed value becomes $1.2 million to $1.3 million.
“I don’t know anybody in central Indiana that owns commercial property that thinks they’re paying a-less-than-fair tax rate,” said David Reed, the Indianapolis managing director for Los Angeles-based CB Richard Ellis, a real estate brokerage firm. “If the assessed valuations go up by 20 [percent] to 30 percent, that will be really catastrophic for commercial property in central Indiana.”
Although homeowner assessments will change very little according to Bowes, homeowners will get a windfall of property tax relief because of the higher business assessments. You may recall that local news reports last year indicated that most business property assessments had changed very little over the past 8 years while homeowner assessments had skyrocketed. It seems to me that this is just an attempt to even things out so that businesses feel the full impact of the fiscal policies they have generally supported, which included higher taxes. They don't see it that way, however. “This isn’t going to be a good thing for Marion County as a whole,” said Roland Dorson, president of the Greater Indianapolis Chamber of Commerce. “Business understands it needs to pay its fair share. But you don’t want to drive business out of the county.” Dorson was a big proponent of the many tax increases Mayor Peterson pushed through in recent years.