- Taxpayers may find that fiction is worse than fact when tax time rolls around
The anticipation may be worse than the hit. Rumors, misinformation and the long delay have most county residents very concerned about their property taxes resulting from the reassessment.
But it appears that cost shifting and timeliness of the due date are the main issues.
"There is a maximum amount of revenue that the county can collect from property taxes per year with maybe a 5% inflationary increase," said Clay County Auditor Joe Dierdorf.
When the assessed values increase, the tax rate decreases proportionately to keep the amount about the same.
The new reassessment will not greatly change the total amount of revenue paid to the county. But it will cause some cost shifting in the specific amount each individual pays.
According to County Assessor C.R. Boyd, under the old system assessment was based on reproduction cost with age depreciation being a major factor. The older the home, the lower its assessed value and tax liability.
With the new reassessment system the base value of property is determined by its fair market value. With the age depreciation factor gone, taxes on some of the very old homes will increase substantially.
There have been horror stories of taxes doubling or tripling. This could happen on some of the old, large, restored and maintained homes in the county but should affect relatively few owners.
Some other tax deductions have been changed to help offset the effect. The Homestead exemption was $6,000 but will now be $35,000.
With the mandated revenue cap, if some properties' taxes increase, then others will decrease. The Auditor and Assessor believe that, for the majority of property owners, the taxes will stay close to last year's cost or have only slight increases. The tax cost on some of the newer homes could actually decrease.
The delay in receiving the tax bill could cause some residents more problems than the amount simply by when it may come due.
The reassessment delay is caused by several factors. A new computer software program had to be selected. Equalization studies were done and sent to the state. Current information has to be converted into the new pricing schedule.
Boyd said, actually, by statute, Indiana Code 6-1.1-1.22, the Township Trustees are responsible for the reassessment in their respective townships, not the Assessor. One of the main responsibilities of the Assessor is to maintain all of the records of the townships in a central location.
All properties have to be reviewed and it must be verified that the data is correct. The Trustee may complete the process or hire it out. But all trustees must do it uniformly.
Due to the necessary training required to complete the process, Clay County decided to hire out the reassessments on commercial property and land. They contracted Johnson & Associates out of Bloomington for the commercial property. Land was reevaluated by the Indiana Assessment Service from northern Indiana. The Trustees are doing assessments on residents and farms with the assessor's staff at the court house verifying the data.
Once the assessor's office has completed their part, the data goes to the Auditor's office. They will apply a tax rate and the appropriate exemptions then send the data to the State for certification. The certified results are returned to the Auditor who will transfer the information to the Treasurer. The Treasurer's office will then produce and mail out the tax statements to property owners.
All of this takes time, a lot of time. Boyd said he hopes to have the reassessment data completed and to the Auditor's office within two weeks. Dierdorf said from that point, the average time frame for the process to go from Auditor to taxpayer is 100 to 120 days.
So it could possibly be December or even January when tax statements are received and due by county residents. When the bill is received, it will be for both installments of the 2002 due in 2003 tax bill.
Paying a full year of taxes near Christmas time could pose a serious financial burden on some residents. Clay County Treasurer Jack Withers reminds people that they may pay their taxes now based on last years rate. Adjustments will be made as necessary when the reassessed rates are sent.
"That will help prevent a big hit coming all at once," Withers said. "especially during the holidays. About 30% of the taxpayers have already paid."
Also, property owners are reminded that if taxes are not paid until after the first of the year, they can't use their tax liability as a deduction for 2003.
"The reassessment has been a difficult situation for every county in the state," Dierdorf said. "And we're in much better shape than lots of counties."