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Tuesday, March 09, 2004

Indiana Law - Interesting Dispute Over Paying for Lake County's Tax Reassessment

The only thing clear is that, as offered by one of the attorneys quoted in the story, "This could take years to resolve." As reported here in the NW Indiana Times today:

Lake County taxpayers will not have to pay Arthur Andersen LLP's disputed $10.5 million bill anytime soon, thanks to some maneuvering by county lawyers. A Marion County judge last week halted Andersen's civil lawsuit seeking payment on the defunct accounting firm's canceled contract for the 2002 reassessment.

Although Andersen sued Indiana's Department of Local Government Finance, and not Lake County directly, taxpayers here still are potentially on the hook for some of those millions because the reassessment law requires the county to pay for it. That state case now could be delayed for years while the county's counterattack -- a federal lawsuit filed last month claiming Andersen's contract is invalid because the reassessment was unconstitutional -- winds its way through the courts.

Why is it said to be unconstitutional? According to the story:
The federal suit challenges the state law that required only Lake County to hire an outside firm to conduct the reassessment. Because Lake County was the only one of Indiana's 92 counties mandated to hire an outside firm to conduct the reassessment, the law amounts to "special legislation," according to the federal lawsuit. The lawsuit also claims the tax-reform state law violates the federal Voting Rights Act because it strips residents of the right to have their property assessed by the officials they voted into office to do just that. If the federal court rules in the county's favor, Andersen's contract would be dissolved and the company could be paid only for work it actually did, [County Council attorney Gerald] Bishop said.
More:
For months, Bishop and other county attorneys, Indiana tax officials and Andersen have been trying to reach a deal over the millions in claims and late fees Andersen said it is owed.

Although former state finance Commissioner Jon Laramore signed off on $9 million in invoices two years ago, the state and the county said the company didn't do much work and is not owed the money.

"This could take years to go through the courts," Bishop said Friday. "We are willing to pay them for what they did, and at some point they are going to have to show us (proof of work.)"

Posted by Marcia Oddi on March 9, 2004 08:05 AM
Posted to Indiana Law