"It ain’t over
Gov. Mitch Daniels did the right thing last week when he put both feet on the brakes of the runaway train our property taxes have become, ordering a reassessment in Marion County. That reassessment should begin a few days from now. It looks like reassessments will take place in other counties, too.
Daniels’ action was a response to the outpouring of public anger that came gushing into view once peoples’ tax bills began arriving in the mail. Indianapolis seemed positively French as all kinds of folks took to the streets to let their elected employees know the depth of their indignation.
These protests were — and should continue to be — important. Without them it’s possible that nothing positive would be happening now.
In calling for a reassessment of all real property in Marion County, Daniels said there was evidence that business assessments were either left undone or performed inaccurately, contributing to an unfair tax burden on homeowners. He indicated that this evidence came from the Department of Local Government Finance and the state’s government efficiency group, stating in a press release that they had “been poring through parcel data for the county in recent days.” This research found, for example, that the assessed value for nearly three-fourths of commercial and industrial parcels in Marion County did not change over a six-year period.
This is troubling information — and it’s good to bring it into the open. But we have known for at least two years that methods of assessment in this state were a mess. In October 2005 the Indiana Fiscal Policy Institute, a private nonprofit organization, published a report evaluating the property reassessment project ordered by Indiana’s Tax and Supreme courts.
A little background is helpful: The Indiana Constitution requires that property tax be based on “a uniform and equal rate of assessment.” Beginning in the 1990s, a series of court decisions found that the state’s long-standing methods of property assessment failed to meet this test and ordered that a new standard be employed that was “objective and verifiable.” In 2002, Indiana began a general reassessment of real property based on market value.
Joe Kernan was lieutenant governor at the time. Kernan saw that the new form of assessment would need to be evaluated to determine whether or not it passed constitutional muster. So he commissioned the IFPI to conduct an independent study. In the meantime, our first round of property tax increases kicked in.
That was in 2003. Much to the IFPI’s amazement, it took over two years to deliver their report — and even then five of the state’s 92 counties remained unheard from.
Among other things, the IFPI found a “systematic lack of uniformity in assessment practice and assessment results”; that “local governmental assessment officials and their contractors do not understand that they have a responsibility for assessment quality that extends beyond their own county”; that “the type, quantity and quality of data currently collected will not support a market value system”; that many counties and townships did not meet professional standards of assessment; and “there is inconsistency in assessment interpretation and administrative practice between the counties.”
That’s not all. The report goes on to say, “The State has not been willing or able to perform its oversight function … The current county self-evaluation equalization system is a sham. Hence, there is no accountability, nor has there been for several decades …” Which is why we ran afoul of the state Constitution in the first place. Property tax assessment in Indiana still fails the “objective and verifiable” test.
It is interesting to note that Daniels has called on Joe Kernan, the man who commissioned this report, to co-chair a Blue Ribbon Commission on Local Government Reform. He and state Supreme Court Chief Justice Randall Shepard will deliver their recommendations in December, in time for the next session of the state Legislature. It doesn’t take a rocket scientist to predict they’ll have some uncomfortable things to say about the good ol’ boy money sponge we call county and township government. The question will be whether or not the good ol’ boys in the state Legislature will have what it takes to kiss their county and township cousins good-bye.
Remember, these are the geniuses that, for two years, have been sitting on a report that says our unconstitutional property tax system is probably still unconstitutional. They knew this but they put your bill in the mail anyway.
And if that’s not a reason to keep protesting, I don’t know what is.