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Thursday, October 01, 2009

Ind. Law - Even more on: "Did an amendment to this year’s state budget open the door to tax refunds for nursing homes across the state?"

Updating this ILB entry from yesterday, another story has turned up, this one from the Sept. 24th Kokomo Perspective, reported by Tim Turner. Each story seems to add a little more information:

Once again, language buried in the state budget bill could cost the county money, but this time the number is close to $2 million.

This time the benefactors of the favorable legislation are for-profit assisted living facilities which, through recent decisions in the Indiana Tax Court, are now considered charitable organizations exempt from paying property taxes. However the organizations have traditionally paid property taxes, so the state legislature decided to allow them to appeal their taxes for the past nine years and get a refund to the tune of $1.9 million in Howard County alone.

The legislation that was passed in Indianapolis applies to all charitable organizations, but none of the traditional not-for-profits have filed for the special exemption. The only ones that have filed are the for-profit companies that are now tax exempt. County assessor Jamie Shepherd does not think state legislators can hide under the guise of trying to help charities.

"I am very disappointed that they are just allowing this," said Shepherd. "If someone came into today and filed a homestead deduction, and they were eligible for that deduction for the past 9 years, there is no law that lets them do that. A judge only has the ability to interpret the law if there is room for interpretation. I know these legislators get these decisions from the tax courts, at least the local ones, because I forward the decisions to them all and tell them how they will affect Howard County specifically. To me, it is their responsibility to make sure that if that is the way they want the law interpreted that is fine, but it is their job to make sure there is no gray area. Once again it was buried in the budget bill."

In fact, state representative Ron Herrell was unaware that the language was in the budget bill and that it would have this effect on local government. But Herrell, unlike his Republican counterparts in Howard County, did not vote for the budget bill.

"We already see the struggles our governments are having with the tax caps and things like that. Combined with these hardships, it is just another reason I didn't vote for the budget," said Herrell.

A billboard on US 31 accuses Herrell of blocking progress in Indiana, but this change could stop the progress of the in-roads made on personal property tax relief for homeowners across the state.

These for-profit assisted living facilities will continue to get this exemption, which will raise taxes on all the other taxpayers, and there could be a one-time jump to cover the $1.9 million the county will have to pay back.

The county could avoid making cuts by certifying a lower assessed value in the county because of these facilities. Traditionally the auditor certifies the total assessed value of property in the county lower than it actually is because of property tax levy appeals. She has the authority to certify the assessed value two percent less than its actual value in anticipation that the appeal will be granted. When she lowers that assessed value, it raises the tax levy that everyone else pays. Meaning taxpayers could pay for the check the county writes to these assisted living facilities.

Posted by Marcia Oddi on October 1, 2009 04:27 PM
Posted to Indiana Law