« Ind. Decisions - Court of Appeals issues 8 today (and 15 NFP) | Main | Ind. Courts - More on "Lawrence County Judge Found Dead In Home" »

Thursday, November 01, 2007

Ind. Courts - Still more on the property tax challenge in Tax Court

Updating this ILB entry from Oct. 26th, the Evansville Courier & Press and the Louisville Courier Journal sent their reporters to cover the oral arguments yesterday before Tax Court Judge Thomas G. Fisher in a suit challenging the property tax, but the Indianapolis Star apparently did not.

Bryan Corbin of the C&P reports:

INDIANAPOLIS — A group of homeowners and taxpayer groups are challenging the constitutionality of Indiana's property tax system, but whether they get to argue the merits of their case depends on its first clearing a procedural hurdle.

The plaintiffs' attorney for the group of homeowners and taxpayer associations is asking Indiana Tax Court Judge Thomas G. Fisher to keep the lawsuit alive.

Attorneys for the state government, city of Indianapolis and Marion County are asking him to dismiss the case on procedural grounds. They contend the plaintiffs did not exhaust all the administrative remedies available to them before taking their case to court.

Wednesday, Fisher heard lengthy arguments on the government's motion to dismiss the case. He will issue a ruling within 10 days. If the judge decides to keep the lawsuit alive, then the plaintiffs plan to call witnesses at a hearing Nov. 16. * * *

The plaintiffs are asking Fisher to:

n Void the deadline extensions Gov. Mitch Daniels previously ordered that gave counties more time to adopt local-option income taxes to reduce their property taxes. The plaintiffs contend Daniels could not extend those deadlines administratively, that only the Legislature could.

n Overturn a recent 1.65 percent income tax increase in Indianapolis, because one of the Indianapolis City-County Council members who voted to adopt it should have been disqualified over his residency. That council member, Patrice Abduallah, later resigned.

The suit raises broader questions over the legality of statewide assessment methods and the use of tax abatement. It contends the current tax structure does not comply with the state constitution's requirement for a "uniform and equal rate of property assessment and taxation."

Fisher must decide whether to dismiss the case first.

Government attorneys Jon Laramore, Fred Biesecker and Andrew Swain argued the plaintiffs filed the constitutional challenge without trying to resolve their dispute by appealing to state agencies first. They contended the Indiana Tax Court does not have jurisdiction to hear the case, at least not yet.

Price, the plaintiffs' attorney, countered the constitutional issues are too broad to be decided by local tax boards or state agencies.

Lesley Stedman Weidenbener of the LCJ reports:
Attorneys representing the state asked a judge yesterday to dismiss a lawsuit challenging the constitutionality of Indiana's property tax system, saying the plaintiffs must first pursue their claims through state and local agencies.

Attorney Jon Laramore told Judge Thomas Fisher that state law requires residents to exhaust all administrative remedies -- such as appeals and petitions through agencies -- before they can come to the state tax court for help.

"Administrative agencies are fully capable of adjudicating complicated issues," Laramore said.

Attorney John Price, who represents the taxpayers as well as taxpayer groups from across the state, said, however, that those agencies don't have the authority to declare a law unconstitutional and are therefore not the correct venue for his clients' complaints. Requiring them to exhaust those remedies first would be expensive, time-consuming and foolish, he said. * * *

The arguments yesterday focused largely on Laramore's contention that Fisher doesn't have the authority to hear the case until the plaintiffs exhaust all their administrative options.

For example, he said, before the taxpayers can challenge the property tax system in court, they must first appeal their assessments to county boards and then to the Indiana Board of Tax Review. Only when that process is finished can they appeal to the tax court, Laramore said.

Also, he said, the taxpayers challenging an income tax increase in Marion County -- on the grounds that a deciding vote was cast by someone who shouldn't have been a member of the City-County Council -- should have first petitioned the Department of Revenue for relief.

The General Assembly set up those administrative remedies as first steps, Laramore said, because they allow for the settling of some claims without coming to court.

But Price said state agencies can only decide whether an assessment or a tax rate comports with state law. Overturning state laws as unconstitutional is only for a court to decide, he said.

Posted by Marcia Oddi on November 1, 2007 07:44 AM
Posted to Indiana Courts