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The leadership of Indiana’s Department of Local Government Finance (DLGF) came to Bluffton on Wednesday morning to discuss the issues related to the new taxation process with local officials.
DLGF Director Cheryl Musgrave was accompanied on the visit by her agency’s Assessment Division Director Barry Wood, Director of Communications Mary Jane Michalak, Field Supervisor Terry Knee, Field Representative Don Adair, and Local Government Liaison Officer Carol Johns.
Officials from the Wells County Assessor’s, Auditor’s and Treasurer’s offices were all present, as were County Council President Peter Cole, County Commissioners Kevin Woodward and Scott Mossburg, and Bluffton Mayor Ted Ellis. State Senator Travis Holdman and Representative Jeff Espich were also in attendance.
Musgrave worked through the process as it was intended to occur and then began to look at the difficulties experienced in Wells County. The real problems began to occur early this year with the number of appeals of property tax assessments.
In Wells County, there were some 500 appeals. At the time it was thought that the appropriate course of action was to resolve these and then proceed, believing that the work done was correct. As continued delays have occurred as a result of mismatching of data at various steps, the problems have had a snowball effect, producing the current situation.
Local officials noted that causes of some of the data mismatch problems had only being found through consultation with Grant County, which employs an information technology (IT) specialist to assist its officials. That individual had identified similar problems to those experienced in Wells County there, and was able to provide advice to Wells County officials as a result.
Musgrave encouraged local officials not to delay the process on account of appeals. She advised that some counties are still dealing with appeal cases two or three years later, and the process enables these to be dealt with separately.
Musgrave also noted that if a resident has been billed at an amount he or she feels is wrong, and has lodged an appeal, it is possible for them to pay only based on the amount they believe is correct. If the appeal is then proved to be successful and the assessment reduced, the payment may well be correct.
On the other hand, if the original assessment is found to be correct, some penalty fees may still be incurred if the partial payment was not sufficient.
Cole explained that he owned two residential properties, and the assessment on one had a 40 per cent increase (the second consecutive year in which that property had been assessed at an unusually high amount) while the other had been assessed lower.
He could see no logic in the differences, and didn’t agree that he should have to pay a fee for a private survey to support his appeal each year on a repetitive basis.
Local officials were encouraged to take up issues of “unusual assessments” with the company or companies providing the assessments to resolve any inconsistencies, and contact either Wood or Adair if there were serious difficulties developing. Contacting Musgrave herself was given as an option if her officials were not responding in a timely manner.
DLGF officials did enquire what impact the 500 appeals had on the final assessed value for the county. Figures weren’t available at the meeting; however, DLGF figures provided later in the afternoon indicated that an $8,503,300 change occurred as a result of the appeals, representing just 0.4746 per cent of the total real property assessed value of $1,791,512,000 for Wells County.
The DLGF perspective is that the whole process should not be delayed for an “error rate” of less than half of one per cent.
Local officials, meanwhile, are faced with the challenge of providing quality customer service to up to 500 residents (a much higher percentage of the actual community) who were upset enough with their assessment to go through the appeal process, and potentially serious problems ahead if the appeal process later reveals that a major fault did actually occur in the assessment process.
Musgrave also advocated the sending out of two tax bills each year, with provisional bills being sent if final figures were not available.
Wells County officials noted that when they had been considering the option of provisional billing they contacted other counties who had used the process in the past, to evaluate its suitability. The feedback was resoundingly negative, with the clear indication being that it would create more problems later on. Not expecting the delays to continue for this length of time, they had decided against provisional billing on this basis.
Kathy Mounsey of the Auditor’s Office noted that in the 20 years she has worked with the office, the workload has increased dramatically, however staffing levels are still basically the same.
Mounsey expressed concern that insufficient time had been allowed by legislators for the changes to be properly implemented, and the tight deadlines and continuing problems had really provided an extra strain on resources.
Cole also suggested that when major changes to legislation are introduced, consideration needs to be given to an implementation schedule, so that the changes occur at a manageable pace. He noted that the rapid pace of implementation in this case had made things very difficult for local government and DLGF officials alike.
Espich explained that while legislators normally try to take this into account, in this instance, the rapid pace was required to avoid bigger problems that would have occurred if changes were not made.
He noted that with several different offices involved in the process, and doing their best to complete the work required of them, some thought needed to be given to having an “overseer” - not necessarily some one “in charge” of the process, but certainly someone who can help ensure the different departments are working in tandem with each other.
He advised that some counties have appointed a “project manager” to help with this role.
Musgrave echoed the sentiments that the requirements of the job have changed, and counties need to evaluate the best methods of dealing with the change. She suggested local officials form a committee to look at the management of the process to ensure the appropriate staffing structure, and required resources for those staff, are available at local level.
Espich and DLGF officials also encouraged local officials to continue requesting residents to pay their taxes voluntarily at the regular time, while the process continues to be worked through. Credits toward the amount payable will be applied when the bills are sent out.
This will help relieve the pressure to find a large amount of money with which to pay taxes when the bills are sent out, and also provide county government agencies with funds required to continue until the process has been completed.
frank@news-banner.com
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