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Friday, September 07, 2007

Ind. Courts - A number of stories today about property tax legal challenge

Carmel attorney John Price has filed suit in the Indiana Tax Court challenging the property tax. "The lawsuit is the third that Price has filed concerning property taxes this year," according to Lesley Stedman Weidenbener's story in the LCJ, "Lawsuit challenges property tax rates: Questions also raised on assessment process," is available here.

Tim Evans' story, "Lawsuit challenges property tax system: Plaintiffs allege the state doesn't apply tax rates fairly," is available here in the Indianapolis Star.

Patrick Guinane's story in the NWI Times, is available here. It begins:

Indiana's property tax morass deepened Thursday with the launch of a broad lawsuit challenging whether the primary means for supporting local government and schools is administered fairly or competently across the state.

The lawsuit, filed in Indiana Tax Court by Indianapolis attorney John Price, addressed several issues limited to Marion County, but it represents individuals and advocacy groups across the state, including region activist Wes Miller and his Team Hammond Taxpayers Group.

The plaintiffs have requested class-action status, so that the suit could represent all of Indiana's roughly 2 million property owners.

"Taxpayers take reform battle to court" is the heading to a story today by Niki Kelly in the Fort Wayne Journal Gazette. Some quotes:
The new complaint filed Thursday involves 14 counts. Two of them relate directly to Marion County, challenging a recently passed income tax increase and seeking immediate tax refunds to homeowners who overpaid while a new assessment is ongoing.

The claims of more statewide importance include:

• Tax rate equality. Although the Indiana Constitution requires a “uniform and equal rate of property assessment and taxation,” the lawsuit points out that the numerous taxing districts in a county have resulted in widely varying tax rates.

“The differential tax rates are the result of intentional state discrimination,” the complaint said. “While absolute uniformity cannot be expected, differential effects of over 100 percent simply do not comport with the requirements of Article 10, Section 1.”

• Unfair assessment practices. Specifically, the suit points out that the Indiana Department of Local Government Finance instructed assessors to exclude foreclosures and tax sales when assessing a home’s new market value. This practice “skews and distorts the true market value of residences.”

Also, the complaint contends that tax abatements for businesses are unfair, as is a state rule that prohibits reassessing land purchased by a developer based on the sales price until the buyer obtains a building permit for the land.

• Extension of local option income tax deadlines. The lawsuit said the legislature passed a law allowing local governments to increase income taxes as long as they did so by Aug. 1. But Gov. Mitch Daniels has arbitrarily extended that deadline twice.

“We’re asking the court to enforce the statute as written regarding the income tax rate increases on the local level because the legislature said Aug. 1st is the deadline and neither the governor nor the Department of Local Government Finance can rewrite statutes,” Price said. “If they could we wouldn’t need a legislature.”

Daniels said Wednesday in an unrelated news conference that he may very well need to ask the legislature to retroactively ratify his action when lawmakers return in November for Organization Day.

A statement released Thursday from Daniels’ general counsel, Mark Massa, said, “Governor Daniels has acted boldly to protect property taxpayers and shouldn’t be included in this lawsuit.”

• The Common School Fund. The lawsuit claims the Constitution restricts the collection of property taxes for schools to corporations – not homes. But the lawsuit bases the argument solely on a section setting up the Common School Fund, a revolving account to give school districts with lower assessed values low-interest construction loans, technology grants and charter school startup assistance.

Gary Welsh of Advance Indiana has a long post on the suit. Gary has also sent the ILB a copy of the 32-page complaint, which the ILB has posted here.

Posted by Marcia Oddi on September 7, 2007 12:07 PM
Posted to Indiana Courts