Tying up some loose ends from a reporter’s “notebook” which has become overstuffed with spreadsheets and emails and notes from conversations about property taxes:
• A brief explanation: While the first epic published March 19 was a straight news story, we labeled the two-part follow-up series that concluded today as a “News Analysis,” which to a newspaper guy means there may be some “observations” throw in. I felt there were a variety of places in that narrative that are more “observational” than “factual.” There are definite differences — but they can also be a fine line — between “facts” and “observations” and an even finer line between “observations” and “opinion.” Hence, that was a “news analysis” and the “opinions” can be found here.
• The stated goal of the state’s system is to assess owner-occupied residential properties at market value. Clearly, it isn’t working in the macro sense. While there remain variations within neighborhoods that are a puzzle, generally speaking there is some consistency within the neighborhoods. But when a comparable property across town that would clearly sell for much more than its assessment remains undervalued because of a lack of recent sales, there ought to be a way to fix that.
When real estate agents put a new listing on the market, they have an procedure to set an asking price that compares recent sales — not so much in that same neighborhood but “comps” of recent sales of comparable-quality homes in the market area. Seems like the government might find a way to utilize that system.
• It seems fair to point out that compared to our neighbors in Northeast Indiana, Wells County taxpayers fund a smaller percentage of the total county budget. Meanwhile, the amount the county and Bluffton spends per resident is about as average as you can get.
Frankly, there are a variety of conclusions you can draw from that. These numbers may present the classic case of making statistics prove what you want.
• There are “Aha!” moments in an experience like this. The biggest was when I read an essay by Purdue University economist Larry DeBoers about a trend he has detected: Homeowners are paying a bigger slice of the property tax pie in Indiana. He did not use the specific term of “tax shifting,” but that’s exactly what is happening statewide. “Might I be able to get those breakouts for Wells County?” I wondered.
Julie Eicher in the auditor’s office came through quicker than even she thought she could — and those numbers tell the story. It’s a fair question to ask our local government leaders: “How’d this happen?”
Part of that answer is clearly at the state level — our local government officials are not totally to blame. While we can certainly point to the decision to fund the jail renovations entirely on the backs of homeowners, there are other factors determined at the state level.
One of those are farmland values, as evidenced in the drop in percentage paid by the Agriculture sector. With reports of recent farm sales of $17,000 an acre in Wells County, when and how might that show up in the formulas?
• The Local Property Tax Credits remain a mystery — specifically in the wide variations. How does, for example, one residential property in Bluffton see their credits cut in half while a Southern Wells property sees their credits increase, almost tripling? It could be described as a case of “the more you learn, the more you don’t know.”
County Auditor Lisa McCormick was quite helpful in providing information. I have to chuckle when recalling a conference call I had with several officials from the Indiana Department of Local Government Finance back in March, as part of our initial dive into this adventure. When I asked for their explanation, all I can remember is a bunch of mumbling. In hindsight, I should have pressed the issue but I had other questions that day I felt were more important. And in further hindsight, I now understand their mumbling.
Because there are good reasons to mumble. In response to a follow-up question via email for clarifications on these credits, DLGF referred to a formula that involves the Net Assessed Value but McCormick sent me an actual spreadsheet that utilizes the Gross Tax Liability.
While there is a basic formula (Gross Tax x [LIT rate÷100]) there are other variables for each property that apparently make any comparisons irrelevant.
“Each property has its own individual set of circumstances,” she noted. “We can look at each individual property, but these cannot be looked at as a whole.”
While I am sure all these variables are there for a reason, it is hard to discern whether those reasons are good or bad. This remains a mystery to me.
• As in any deep dive into a story like this, there are certain conversations that stand out. This one would be with Hilbert “Skip” Ross on West Central Avenue, whose home has seen the 335 percent hike in their property taxes since 2018.
He speaks quite knowingly of the assessment process since he’s done some investigating on his home as he has watched its assessed value jump, and then jump again, and again. (His Net Assessed Value in 2022 is 207 percent higher than 2018.)
Skip is familiar enough with how things work that he knows a company — Nexus — is a contractor with the county assessor’s office. “Can you tell me why we even have an assessor?” he asked me this week when I met him at his house for a photo. “This Nexus company does all the work, they answer all the questions,” he continued. “Why do we pay these people to do nothing? And you can quote me on that.”
He is quite aware that in terms of dollars, he doesn’t pay as much as most people. He and his wife are getting by OK, “we’re not rich by any means,” he told me, “but we’re doing OK,” depending entirely on their Social Security checks and a few dollars he earns each week gathering and selling scrap metals in order to pay for his wife’s cancer medication.
“It’s not the money,” he said, “we’ll be able to pay it. But it’s this year after year, another increase and another increase. It’s got to stop somewhere.”
Maybe, he said, writing his letter to the editor and posing for a picture and helping me with my story might make a difference.
“We can hope,” he concluded.
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The hope here is that three articles and two commentaries will be enough already about this topic.
The hope here is that our local elected officials understand “tax shifting” and might be a bit more cognizant of the impact their decisions have, they they might ask more questions about how exactly adding this increase here or adding that project there will be paid for. Might they even take an “Affirmative Action” approach to reversing the undeniable trend that’s placing a larger share of the burden on homeowners?
But there are also state policies and procedures that are beyond their control. I can confirm something DeBoer included in his essay, that as homeowners have become more vocal about the increases they’ve seen, “I’m guessing legislators are paying attention,” he wrote. When these issues were shared with one local legislator this week, I was told one of the proposals is to put some sort of an annual percentage cap on how much an individual’s tax bill could increase. We shall see.
But it all still boils down to local decisions — are we focused on “wants” or “needs” — and keeping an eye on how any increases will be funded.
As Skip said, “We can hope.”
miller@news-banner.com
