By Niki Kelly
The Journal Gazette (Fort Wayne)
INDIANAPOLIS – State officials are considering a subtle change to Indiana’s assessment rules that could have a large effect on properties in mixed-use areas.
Assessors annually use sales data of like properties in an area to adjust the assessed value of a property, a process called trending.
But the Department of Local Government Finance – which oversees the assessment system – is drafting a new assessing manual that could change the process. It wouldn’t be applied until taxes payable in 2012.
In the proposed manual, the Department of Local Government Finance wants to move from a “market value in use” system to just “market value” – a change that sounds small but has some county and township assessing officials worried.
E-mails are floating around saying that the change in rules would shift the burden of property taxes from commercial and industrial property to residential.
Allen County Assessor Stacey O’Day said that is possible, but it is too soon to know.
“We’ve read the manual. We are very cautious. We are not for or against the change,” she said. “Right now we are trying to analyze what these changes could mean. I think this is premature.”
Department of Local Government Finance spokeswoman Mary Jane Michalak said Indiana’s current market value in use system reflects the way property is being used now.
But most other states use market value, which is what properties of a similar nature are going for on the open market regardless of their current use.
Under the proposal, in areas having mixed usage of commercial, industrial and residential properties, homes would no longer be compared with only similar residential properties. Instead nearby properties in other categories – such as commercial or industrial – may also be included in the sales data used to determine the assessed value on that home.
But she cautioned that this is just a draft proposal.
“We are meeting with assessors around the state to discuss the language,” she said, noting that the goal is to “ensure property assessments are accurate for everyone so that everyone shares in the property tax burden.”
Sen. Luke Kenley, R-Noblesville – the property tax expert in the Senate – seemed concerned that the state might be blurring the line between residential and business properties.
“I think the DLGF needs to tread very carefully because we have had so much change in the last few years,” he said. “The question is how many changes can we absorb and still keep the system feeling credible to the ordinary citizen?”
nkelly@jg.net