Late property tax bills expected this year

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By Beth Boehne

INDIANAPOLIS (AP) — Delays in property tax bills across the state this year are expected to cost taxpayers millions of dollars.

Officials say property tax bills will be late this year because most counties have yet to submit information the state needs to set rates, The Indianapolis Star reported Wednesday.

The delay in collecting 2008 taxes, as well as holdups in last year's bills — only recently straightened out after a reassessment — could cost taxpayers in Marion County $30 million to $50 million, officials estimate.

Some counties, including Marion and Hendricks, are nine months late in sending their assessment data to the state, in part because they are still catching up after last year's reassessments and struggling to understand changes in the property tax system.

That means homeowners might not know until late summer or fall what they will owe, while local school districts, towns and other government agencies scramble to cover expenses in the interim.

In many cases, local governments were expected to borrow money to cover their costs until taxes can be collected and distributed. Taxpayers will foot the bill for interest on those loans, on top of their regular tax bills.

Marion County Treasurer Michael Rodman said the delays in resolving 2007 tax bills mean the first installment of 2008 bills are not likely to go out until November.

"We're in a financial quicksand," Rodman said. "I want this to be the last cycle where we are behind."

If things had gone correctly, the first of two bills sent each year would have arrived in mailboxes by Friday and payment would be due to the state by May 10. The second bill is typically sent out in the fall.

Under state law, the Department of Local Government Finance is required to make sure property taxes are processed in time. But Mary Jane Michalak, spokeswoman for the agency, said it relies on township and county assessors to submit data on time.

The assessors say the state has not helped them figure out changes in the property tax system, including new real estate "trending" rules, which are designed to reflect more up-to-date market values.

The Department of Local Government Finance is processing most county tax rates in the order they are received.

Of Indiana's 92 counties, the state received assessed values from two counties each in January and February and 16 counties in March. Those figures were due in August.

Local officials say they're trying to take the time to do assessments correctly to avoid last year's debacle that forced reassessments.

State Sen. Luke Kenley, R-Noblesville, who spearheaded the property tax relief plan in the Legislature this year, said he expects tax officials to eventually catch up.

"With our market-value system, values need to be fairly current," he said. "I believe we are on the right track. We just need to be committed to getting trending to work."

Michalak said her agency is having its budget division put in extra hours to process the numbers as quickly as possible. She said she hopes counties will better understand trending after this tax cycle is complete, reducing the likelihood of major delays in the future.

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