Friday, April 27, 2007

Marion County Property Tax Debacle

While there has been considerable discussion in the mainstream media about the sharp increase in property taxes statewide due to the first reassessment in 6 years--a 24% increase according to the Legislative Services Agency--there has been no discussion of what is happening in Marion County. The Indiana Legislative Insight's Ed Feigenbaum drops this bombshell. He reports that homeowners in Marion County will see an average increase of 25% in their tax bills, while businesses will see little or no change. Feigenbaum writes:

Estimates appear to show that residential assessments across Marion County will increase more than 25%, relatively consistent with surrounding counties, but the vast majority of business assessments there have not changed since the 2002 reassessment . . . unlike at least two surrounding counties (business values increased, on average, by more than 25% in Hamilton County and almost 20% in Hancock County). In Marion County, preliminary numbers suggest business assessments increasing by single-digit percentages.

Say what? Apparently the positive business climate, expansions, economic growth, rising commercial property value since 1999 (the valuation date for the 2002 assessments), and trending has been overlooked locally, leading to concerns that such minuscule increases in business assessments, combined with the 2006 elimination of the inventory tax, will likely produce larger than expected tax shifts to homeowners across Marion County.
Even more troubling is the fact that "60% of the business assessments" in Marion County haven't changed since 2002 according to Feigenbaum. He notes that there were a lot of complaints 5 years ago that the business assessments came in too low, causing a shift in tax burden to homeowners. The timing of this news could not be worse for Marion County homeowners. "Rising property taxes combined with the steady number of foreclosures, rising interest rates and a projected decrease in new housing starts could have disastrous effects on the Indianapolis housing market (and developers gripe that unsold houses are not treated as inventory, as e.g., a car dealer’s unsold vehicles would be)," Feigbenbaum writes.

So how could Marion County's township assessors fail us so badly? It might be easy for the newly-elected assessors to blame their predecessors, but Feigenbaum says not so fast. "With many fingers are pointing to the township assessors in office from 2002-06, some are also questioning why some of the incumbent assessors have failed to make corrections since January," he writes. "In the midst of this, the new Marion County assessor is trying to assert more control over the assessment process, and, not surprisingly, is finding some pushback from the majority of township assessors," Feigenbaum adds. "Some are also questioning why the Department of Local Government Finance so quickly approved Marion County’s ratio study . . . a move that prompted complaints from assessors across the state," he concludes.

Maybe this explains why Marion County's tax bills aren't being mailed until June. Perhaps someone didn't want this devastating news to Marion County homeowners to hit while the legislature was in session (and somebody might actually do something to address the mess) and before next month's municipal primary election where voters could express their outrage.

I think the time has long since past to turn the job of assessing property over to real professionals. Let's stop leaving this critical task to unqualified political hacks. Let's eliminate township assessors, along with all township government in this state.


Anonymous said...

This is indeed very disturbing news. What do you think AI, would it be possible for Indiana homeowner/taxpayers to come up with some type of ballot initiative such as Prop 13 in California back in '78 to deal with this mess?
This increase will push many homeowners,especially those in low to moderate income areas of Marion County right out of their homes and all the while, Marion County business property owners get a free ride? With over 1/3 of the businesses in Marion County on TIF's, Abatements and Cash gifts from bond issues it's not surprising that the homeowners would be left to pick up the tab. It's criminal, I don't know another way to describe it.

Bloggin Fool said...

The figure on abatement isn't 1/3, but it's too high, and they're handed out like candy. FYI, the ratio between commercial and residential property was part of the tax court judge's decision, and he concluded commercial enterprises have been paying too much of the share for decades.

This problem has been brewing for eight or nine years. The Tax Court judge warned about it, and the legislature had years to fix it.

The legislature establishes the framework for raising taxes. Local governments levy the taxes. Few untis of government have raised their levies very much in recent years, exccept...the amount of moeny they got from the inventory tax, in some cases, amounted to 4-10% of their total budget. That's a big hole to replace. It could be replaced by cutting services and raising taxes, or both. That's just the facts.

Township government is expensive, and often duplicitous, but at 5-11% of your total tax bill, it's not the only problem. The overall framework and the lack of preparation by the legislature...that's the problem. A perfect storm of trending, tax court decision, switch in comm/residential ratio...a fool could've predicted this.

Place the blame, for now, squarely where it belongs: the Indiana General Assembly of Fools.

Anonymous said...

Feigenbaum is totally off the mark with this one. He is trying to kill the messenger. I am a township assessor in Marion County, my trending is right on the mark. The if the taxes go it's because THE UNITS OF GOVERNMENT WANT MORE MONEY NOT BECAUSE OF TRENDING. I'm not sure if Mr. Feigenbaum is referring to "business" real estate or personal property not increasing. . The real estate values were arrived at EXACTLY how the state requires us to arrive at the assessed values. If he 's referring to personal property, why wouldn't it go down; the legislature eliminated inventory tax and instituted investment deductions which most businesses quality for.
He apparently spoke with the Marion County Assessor for his information. Sorry but he's only been in office less than 4 months with no previous assessing experience and could hardy be considered an expert in this field. I do not understand how he is trying to "assert more control over the assessment process." We have our statutory duties and he has his.

Anonymous said...

Gary, are you sure Bart Peterson didn't write this? What a coincidence that this comes out with only 2 1/2 days left in the legislative session.

Anonymous said...

First, you can not compare Hancock and Hamilton counties to Marion. These two doughnut counties do not have the tax base nor the numerous amounts of intricate, democratic institutions that are necessary to the establishment and stability of major cities like Indianapolis. Instead of placing the blame on the assessors, who, I may add, were voted into office by the constituents of their respected townships, the blame should be focused on the almighty Bart Peterson. Bart's regime has handed out countless tax abatements which which will last for years after he leaves office with his tail between his legs. These abatements have placed a huge amount of the tax burden of the average property owner. However, if some of these abatements did not exist, much of the city's workforce would be out of jobs. In hind sight, I guess the extra 400 dollars a year isn't too bad, but then again, you may not get that 65" TV, and a downgrade to the 50" may be in order. We should also focus our interests on our legislators. Your local representatives are the individuals who determine your tax rate, the assessor, however, determines the value of the property by following a strict set of statues outlined by the state. Also, maybe we should look at our renowned public safety system. Astronomical pensions plans have set the city into a downward spiral as well as a vicious, economical transition to IMPD. Who do we have to blame for this? DING DING DING, BARTY POO!!! OH, I almost forget, we are paying for the RCA Dome, Lucas Oil Stadium, Conseco Fieldhouse. We may not have our houses and schools, but damnit we still have our Colts on Sundays, whoooooot. Advance Indiana needs to halt their ignorance and take a course in State and Local Politics. What are taxes used for? To pay for the government, and when they are throwing out millions like its candy, the taxes will be raised every year at alarming rates until it ceases.

Quit blaming the wrong people, it causes cancer.

Wilson46201 said...

Stop being so damn Indianapolis-centric! This is happening all over the entire state, not just under the evil Democratic Ghetto-Mafia BartFart-Bling-Bling Marion County.

All 1004 township assessors use formulas provided by the state with general leadership from the Legislature. Assessing is a very formulaic system. Very little discretion involved. Crank it out!

Businesses have been hollering about too high taxes so much has been stripped off businesses and forced onto residential property. That's your pro-business GOP at work!

In 1990 I ran a query on Center's ratio: one third of the tax base was business/inventory tax. This portion is being shifted onto home-owners now. Individually-owned residential properties made up less than 5% of the total tax base. This has shot up now.

By the way, Center Township Government taxes are 1.45% of a total tax bill -- hardly crushing or onerous or burdensome.

Indiana has no referendum process. Period.

Anonymous said...

It is just a shell game.

For people who do pay property taxes - if you lower them and allow the local gov. to RAISE other taxes such as income they will probably pay about the same amount regardless.

It is even worse for those who do not pay any property tax. They do not get a benifit of a lower property tax rate but still have to pay higher taxes such as local income tax. So they end up paying more at year end.

Anonymous said...

This article hits the nail on the head. I have similar properties in Lake County (Center Twp.)and Marion County (Franklin Twp.) and I can honestly say that I am getting a huge tax break in Marion County. Land values and tax rates aside, these two identical properties are assessed at different rates. I think my property in Lake County is assessed relatively close to its true value, while my property in Marion County is assessed nearly 50% lower. While I have always wanted to eliminate the township assessors in Lake County, it appears that they are doing a much better job than their counterparts in Marion County. I think that economic development will be taking a huge hit in Marion County as it did previously in Lake County. Consolidation in Marion County....Yes. GO BART!!!!

Anonymous said...

Rumor has it that the easiest assessor job in Indiana has been the Marion County Assessor. Why? Because the townships have always run the show, and the county assessor has done NOTHING. Now that the puppet master is no longer a township assessor, I hope that the new county assessor does his job the way it is supposed to be done. One way or another, the township puppets will be cutting their strings with the puppet master. I hope it is because their jobs are eliminated.

Wilson46201 said...

The County Assessor's only job is to operate as an appeals judge. If a taxpayer doesnt agree with his assessment, it can be appealed up to the County Assessor -- this supposedly eliminates any possible favoritism or ignorance by a township assessor.

Residential property is pretty simple to assess. It's the expensive giant skyscraper or sprawling offices that involve BIG BUCKS where there's more appeals, challenges and adjustments.

The County Assessor is never to initiate any assessments, just operate as a court-of-appeals for assessments.

Just to remind folk: I've been a certified Indiana Assessor/Appraiser for 20 years now...

Anonymous said...

I have been a certified appraiser (MAI) for more than 30 years and have worked in Indiana and Illinois. The county assessor in both states is supposed to make assessments uniform between the districts/townships and the property types (residential, commercial, etc.) with their equalization studies. This way if the township assessors are not consistent, the county can fix it. This is what I am seeing in other counties in Indiana that are not experiencing the same problems as Marion County.

Anonymous said...

WTHR just reported a few minutes ago that property taxes in Howard County/Kokomo will go up as high as 40-50%, forcing many out of their homes and crippling an already struggling county that is losing jobs and business.

Anonymous said...

"In hind sight, I guess the extra 400 dollars a year isn't too bad, but then again, you may not get that 65" TV, and a downgrade to the 50" may be in order."

You hit the nail on the head. I hate to burst you bubble, but that $400 is paying for the civilization we have at this point in time. The fact is we have thousands, maybe hundreds of thousands, layabouts, bums, and mopes in this city. They are government children from the cradle to the grave. Locally the issue is police and medical care for these folks. They constantly get into fights and call the cops to come and solve their issue. A few steal and commit other crimes to provide a tax-free cash income (selling stolen goods, dealing drugs, working under false names while on various forms of welfare,etc. etc..)

Folks, these animals need feed and cared for. The zoo keepers (the cops) have to deal with them constantly. If the zoo keepers stopped, guess who gets sued for not doing their job. Simple fact is that as civilized Indianapolis has grown, so has third world Indianapolis. It was not for The New Deal-Indianapolis jobs program, I think this city would be like Detroit. Almost all the major construction projects downtown had some sort of tax incentive. So basically instead of Simon, Ir$ay, etc. paying their fairshare, they got tax breaks. Those tax breaks did put folks to work, but at what costs? If those folks lose their jobs and become government consumers, will there be enough tax money to help feed them and care for them?

The perfect storm has been coming for years. This is just the start. Everyone loves it when their homes sell for such a premium, but get upset when it is assessed at that value. They all want the SUVs, the HDTVs, the fancy yard, the fancy house in the _must_ have neighborhood of the year, etc. etc.

People are spending way more than they are making. Easy credit and greed all around is to blame. The burnoff of useless eaters cannot be stopped. Sit back and watch it unfold live on Fox News.

frank said...

Sorry to report to all the homeowners, but the Marion County figures are correct as reported. Who's to blame? Is it the Legislators fault ?

Here's the scoop: Despite 5 years of training on market value, the Marion County Township assessors (a majority of whom have been in office for years) just don't understand that their inability to assess businesses at market value shifts the tax burden to homeowners.

Ignore the rhetoric; ask the township assessors for the assessment figures for any downtown Indianapolis or Pendleton Pike property and see if there have been any changes to most property. The answer: NO. Just for fun, check out the assessment of St. Elmo Steakhouse or the Slippery Noodle!! I wish I could buy those buildings for that ridiculously low value.

Look for a state government agency to order REASSESSMENT of these business properties in Marion County before these mis-conceived taxes take effect.

Let's get rid of the township assessors and give someone, anyone, else a try.

Wilson46201 said...

"People are spending way more than they are making. Easy credit and greed all around is to blame."

Is the above anonymous nobody remembering Constantino Lane?

Wilson46201 said...

Isn't it peculiar that a group of both Democratic and Republican township assessors, with widely varying degrees of experience are seemingly having the same sort of problems? Now realize this is happening all over Indiana in all 1004 Townships.

What's the commonality? The State regulations under which all these local assessors work. Guess who's been in charge of state government and getting ready to run for his 2nd term? Mitch "The Blade" Daniels, the financial genius who assured us the War on Iraq would be cheap and brief.

It's a mess in Mesopotamia and it's a mess in Hoosier taxes. Thanks, Mitch! Heck of a job!

Anonymous said...

Attention Assessor Said: Have you not seen the summary of tax shifts by county being circulated around the statehouse? It shows that Residential is going up 23% and business is going down 1%. I'm no assessor, but that means homeowners are going to see one large tax shift. I guess my ability to grasp the numbers makes me overqualified to be a township assessor in Marion County.

Anonymous said...

Well.... the property taxes on my farm have been eating away at any gains in the sale of grain for the last several years (like I had gains every year). My taxes are already up over 60% in the last 5 years. If I get a 25% jump on this years tax bill that will mean my taxes will have risen 100% since 2001 (160% x 25% = 40%rise this year overall). There goes any bump in profits that ethanol is giving to corn (if I can get corn planted in the river bottoms).

Indiana no longer seems to care for its farming community.

-- Lynn David

Vonnegut Lives! said...

A sad collection of half-facts, no facts and speculation.

This was all predictable. It looks as if the legislature has a temporary fix, about $300 million of relief, which will translate to a 10-15% reduction this year only.

But this property tax system needs a complete overhaul. Let's hope they do it over the summer and next year.

A few questions:

Wilson: you earlier this week posted that township government costs about 5%. Not it's 1.45%? Huh?

Wilson: You're state-certified for 20 years? Interesting, because Indiana did not have a recognized certification program until the RESPA federal laws mandated state-by-state conformity, in 1991-92. A state board, appointed by Gov. Bayh, then began the codification process for administrative rules, appraiser certification, etc. That board was chaired by Hoosier Dick Nichols, a nationally-rexognized expert in appraising.

It'd help if the state's largest township, Center, had a certified appraiser. That was possible last year, in the Dem primary, but the certified appraiser candidate didn't kiss the right rings. Instead, we got a partisan hack, nice enough guy, but no experience in real estate appraising. Zippo. His job? Head janitor for IPS. Important job, but nothing to do with real estate.

He is tied to the Center Township power structure, though. Very closely tied.

It'll never end until this township system is imploded and qualified people take over the mechanics of the system.

Wilson46201 said...

Relying on memory, I had earlier said CT government taxes proportion was less than 5%. I then checked for the actual figures: last year it was exactly 1.45% (tax district 101)

In 1987 I took and passed the 3-hour official State Assessor's test. Someplace around my cluttered house, I have the certificate -- I havent 'used' it for many years now ...

Real estate business isn't exactly rocket science -- calls for "experienced professionals" doing routine assessing is rather excessive. Sadly, the fact I could calculate the area of a hexagon was considered remarkable!

Anonymous said...

Anonoymous Farmer: I am buying all farmland for sale at $880 an acre. Quit your crying, no one is getting more help in Indiana than the farmer. Your land is worth three to four times what you are paying on now. I hope someone files a constitutional case against the farmers for preferential treatment.

Wilson46201 said...

Gary Welsh is a Hoosier attorney. That means he went to college and law school then passed a rigorous bar test and is licensed by the State of Indiana. He continues his education. That is a true professional.

Assessing/appraising can be done by a high school graduate with several months of additional training. There's a state-mandated test which isn't terribly difficult. As I said before, assessing isn't rocket science.

Center Township Assessor Gene Akers is an experienced administrator. He runs an office with longtime 40 employees -- keeping it going smoothly is his real job, not dealing with acreage or skyscrapers.

With 1004 Hoosier townships, state regulations give very little discretionary power to the Assessors.

When I worked in the Democratic-run Center Assessor's office, folk there were continually aghast and railed against the excessive abatements the Republican Lugar/Hudnut/Goldsmith administrations had been handing out to their political contributors for so many, many years...

Anonymous said...

Wilson, I agree with you 100% regarding the fact that the Lugar/Hudnut/Goldsmith administration handed out abatements with no end to their business cronies. The GOP has always taken an extreme view relative to a pro-business type government.
It is all too obvious, as I look over Mayor Peterson's campaign financial reports here at my desk, that he is conducting city business EXACTLY the same as the prior GOP mayors. In fact, he has completely outpaced all three prior mayors of Indianapolis combined in awarding subsidies to businesses.
The same business interests that put the former GOP mayors in office have effectively placed Peterson in that same office. One only need to look at Peterson's contibutors to see this pattern.
In effect, Indianapolis STILL has a Republican mayor who HAD to run under a Democratic label to be elected.
The game's the same in Marion County today just as it was during the GOP Bulen years. Peterson used the "perfect storm" of changed demographics in Marion County to run and win as a Democrat with the huge financial backing of former GOP contributors.
To assume that Peterson is not simply carrying on where former GOP mayors left off is naive at best. Follow the money. I clear as day in his he campaign financial reports.
Take Lugar, Hudnut and Goldsmith then multiply by 10 and you have Peterson, the greatest "Republican" mayor this town has ever seen.
And we all wonder how $5 billion gets handed out to the business community in this town while the taxpayers are left to pay the piper.
No one ever said that good politics meant good government.

tax payer said...

Tax Payer
I have lived in Franklin Twshp for 19 years. This property tax thing is nothing new. It has been a problem the whole time we have live here. When we moved into our house 11 years ago our Property tax was 2600.00 now it is 4500.00. That is crazy! I talked to someone at the assessors office and asked why they were so much. He said the school boards don't work within a budget they tell the assessor how much they need and the homeowners are charged accordingly. Most of our property taxes are for schools. In 19 years there have been Republicans and Democrats in office and the same crap has gone on no matter who is in there. No one seems to know who is to blame. I think they don't want us to know who really is to blame. Whoever it is DO SOMETHING before there are many more foreclosures.And businesses need to pay their fair share too!

Anonymous said...

dont think 400-500 is much to pay? we live month to month we have no credit dards pay for what we have wwith cash. we had to tell our son he cant have fireworks for the fourth because we have no spare money because my car broke down. so i think people are going to have to do more than downgrade to a smaller tv. maybe some will have to go longer with out new shoes or clothes or even maybe food. think about those people and not the ones who have the extra money or credit cards,