DLGF RULES AGAINST PETITION OBJECTION

In a six page opinion, DLGF Commissioner Cheryl Musgrave ruled against a petition filed by fifteen taxpayers challenging the City of Hammond's 2008 budget.


Members of Team Hammond Taxpayers' Group had presented the challenge at the DLGF hearing on October 30, 2008 in Crown Point.

The DLGF could not determine whether the petitition objection had been filed withing the 10-day time limit but decided to err on the side of the taxpayers. The Lake County Auditor's office was cited by Musgrave for failing to publish the approved tax rates within the 15-day deadline and for not time stamping the taxpayers' objection.

"A city's decision about its spending priorities is a policy decision under the purview of the city and its elected officials," Musgrave said. Therefore, allegations of "reckless spending" by the taxpayers did not constitute grounds by which the DLGF could overrule or void provisions of the city's budget.

In instances where a city officials uses tax dollars for a personal vacation, the DLGF or the State Board of Accounts could take action, but the DLGF found no such violations in the 2008 budget.

"The estimated budget published by the city is just that - an estimate - that is subject to change during the public budget hearing and adoption process," Musgrave said. The DLGF does not view mathematical errors as critical in the estimated budget. They are only estimates and are not the final amounts in the budget order.

Musgrave put the city's debt limit at $16.4 million which would not exceed the constitutional debt limit of 2 percent of the city's adjusted value of taxable property. Lease rental agreements for financing capital projects are not included in the 2 percent limit. Judgement bonds of $2.86 million was the only debt Musgrave found applicable to the state statute regarding debt limit.

Regarding government inefficiencies and taxpayer concerns, Commissioner Musgrave suggested taxpayers urge their local officials to action under the Government Modernization Act and the Home Rule Act.

Although Jim Premeske of Team Hammond was impressed with the quick response of the DLGF as the taxpayers had requested as well as the extensive citing of state statutes, he questioned the purpose of a public notice if the notice is not required to be accurate.

"The DLGF states taxpayer challenges are based upon estimates," he said. "What other figures could the citizens possibly have?"

He also challenged the DLGF's finding that the city only has a $2.86 debt limit pertaining to the state limit. "This must be creative accounting at its best," Premeske said.

After "cautious and detailed due diligence", Premeske said Team Hammond will have to decide if they want to pursue the matter further.

STATE APPROVES LAKE COUNTY TAX RATES

The DLGF (Department of Local Government Finance) gave approval to Lake County's property tax rates last Friday giving the go-ahead for county officials to begin calculating reconciliation tax bills for property owners.

Lake County Auditor Peggy Holinga-Katona says her office can begin figuring out the final tax bills which will be mailed out in January with payment due 15 days later.

Provisional bills were sent out earlier in October and contained half the tax relief enacted by state legislators. The other half of tax relief will be included in the January reconciliation bill.

Katona also said homeowners will be able to go to the county treasurer's website by the week of Thanksgiving to find out what they owe.

NORTH TOWNSHIP TAXPAYERS HAVE THEIR SAY

By a vote of 25,305 to 17,550, voters chose to abolish the North Township Assessor's office and shift the duties to the county assessor.

And it is easy to see why the referendum to eliminate the North Township Assessor went the way it did on election day.

Despite John Matanovich's claim about the county having outsiders come in now to assess your properties, most of us remember the state calling in CLT to do Lake County's assessment because some (not all) township assessors were not fairly assessing properties to begin with.

How many of us had to go through the process of appealing unfair assessments, paying for appraisals, and dealing with the bureaucratic nightmare that went along with the appeals?

How many of us had to wait 1-1/2 to 2 years to get their first appeals straightened out?

How many of us have had to file more than one appeal because the township assessor refused to honor a state-certified appraisal and went back to the original CLT assessment?

How many of us are still waiting for resolution of their 2006 appeals, have overpaid their tax bills and are waiting for refunds?

And if the North Township Assessor's office was doing such a swell job, how come there continue to be so many appeals?

If an employee in the private sector does not do their job properly, they get fired and replaced with an employee who will.

Guess the voters finally got smart or fed up or both. Take your pick!

PETITION OBJECTION HEARD BY DLGF

On Thursday, October 30, 2008 at the Lake County Government Center, the DLGF held a hearing regarding the petition objection filed by the Team Hammond Taxpayers' Group regarding the 2007 Hammond city budget.

Indiana Code 36-6-6-14.5
Objection by taxpayers; department of local government finance hearing and action; appeal Sec. 14.5. (a) If the legislative body issues a special order under section 14 of this chapter authorizing the executive to borrow money, not less than ten (10) taxpayers in the township who disagree with the special order may file a petition in the office of the county auditor not more than thirty (30) days after notice of the special order is given. The petition must state the taxpayers' objections and the reasons why the taxpayers believe the special order to be unnecessary or unwise.

What does this mean? If taxpayers disagree and object to a special order (in this case the Hammond city budget) not less than ten taxpayers may file a petition asking for a department of local government finance hearing and action.

Why was this action necessary? Because Dale Scopelite and Jim Sheehan, members of Team Hammond, found not only numerous errors but many inequities in the budget itself.

Dale Scopelite presented most of the case calling into question such expenditures such as $2,500 in gaming money spent on a Christmas party and $600,000 for a football field. Pay raises amounting to $10 million since 2005 were also questioned given the city's financial woes and the elimination of the health department and city bus service in June 2009.

Scopelite also targeted gaming money: $35 million is distributed among the mayor and six council districts yet a separate accounting shows $43 million in gaming money. The $8 million difference could be used to towards property tax relief.

Jim Sheehan questioned the city's debt, which is limited by the state to 2% of the city's assessed value (Indiana Constitution). The city's debt should be limited to $46 million yet the city's debt is at $96 million.

Jim Premeske brought up the parity clause for the Hammond Fire Chief and Police Chief and the amount of taxpayer money spent on consultants doing city employees' work.

Team Hammond wants itemized costs relating to property taxes and gaming money. "We have shown the numbers don't add up," Premeske said.

This matter now goes to Cheryl Musgrave, DLGF Commisioner for a ruling.

What will this mean to Hammond taxpayers? If Musgrave rules in favor of Team Hammond's objection, it will result in a lower tax levy for Hammond and ultimately lower property taxes for Hammond homeowners and businesses.

TAXES, BUDGET CUTS & LAKE COUNTY

The Legislative Services Agency projects that the 2009 Lake County Government General Fund must be 10.5 Million less than 2008. And since 1998 there has been an 83% increase in property taxes to defray the cost of county government. This went for increases in the number of employees, employee benefits, and inflation. Each month, after the budget, additional funding is requested.

In 2007 the Lake County Government Tax Levy Apportionment amounted to $127,685,000.

Here's a breakdown of where the money goes:

Administration-6.28% $ 8,020,000
State Regulated-6.06% $ 7,740,000
Parks-5.87% $ 7,500,000
Reassessment-Assessors-5.43% $ 6,930,000
Infrastructure-3.47% $ 4,425,000
Criminal Justice-72.89% $93,070,000

Almost 73% of the county's budget goes to the Criminal Justice Departments which include the Sheriff, Prosecutor, Clerk and Courts. Full-time employees in those departments have increased from 30.89% in 1970 to 67.97% in 2003; an increase of 100%. Since the Criminal Justice Departments make up over 70% of the county's budget, these departments can afford to make larger cuts in their budgets.

The county must make a 15% reduction in its general fund in 2009. It's no longer if the county wants to, it's they have to. Elected officials and department heads can no longer submit unrealistic budgets. They must make concrete cuts as well as provide a plan showing where these cost reductions are to be made. Christine Cid, President of the Lake County Council, has already said if elected officials and department heads do not make reductions in their budgets, the county council will do it for them.

The County Finance Committee is not advocating a LOIT (local option income tax). By achieving an overall 15% reduction in the county's general fund, the budget shortfall can be eliminated.

Members of the County Finance Committee are:
Larry Blanchard
Ted Bilski
Christine Cid
Roosevelt Allen
Peggy Holinga-Katona
John Petalas

Contact them and let them know you support fiscal responsibility on the county's part.

VOTE "YES" TO ELIMINATE TOWNSHIP ASSESSORS

Voters in 43 townships spread across 22 counties willdecide in a Nov. 4 referendum if they want to shift assessment duties from their township assessors to their respective county assessors.

The ballot question reads:

Should the assessing duties of the elected townshipassessor in the township be transferred to the county assessor?

MySmartgov.org says “yes,” and urges you to vote “yes”Nov. 4.

Until recently, property in Indiana was assessed by1,008 township assessors in 1,008 different ways. Some assessors’ work may have been impeccable, but the taxpayers in their townships still may have been paying more than their fair share of taxes because of the less competent job by an assessor down the road.

In fact, a 2005 study by the Indiana Fiscal Policy Institute found that 80 percent of the townships did not meet international standards for uniformity. The assessments were well outside the accepted error rate of plus or minus 15 percent – that is, international standards say it is acceptable for a $100,000 house to be assessed anywhere from $85,000 to $115,000.

The error rate in Indiana was 35 percent. In other words, houses that would sell for $100,000 were assessed for tax purposes anywhere from $65,000 to $135,000.

A more recent sampling compared two houses across the street from each other. House A sold in July 2006 for $101,000. House B sold four months later, in November 2006, for $99,900 -- $1,100 less. Yet 2006 taxes, payable in 2007, on House A were $1,467, while those on House B were $2,222 – 51 percent higher. Still another house in the same township sold for $102,000 in May 2006 and was taxed that year, payable in 2007, at $1,166 a year – a 91 percent discount compared to taxes on House B.

The institute’s study – like so many before –illuminated problems that leaders across Indiana have known for years existed. Their questions about the number of assessors – then called “listers” – almost as soon as the system was devised nearly 200 years ago. And there have been question and studies and reform efforts since then.

Still, not much changed.

In spring 2007, Gov. Mitch Daniels asked a group of leaders from across the state to study the issue. The Indiana Commission on Local Government Reform, led by former Gov. Joe Kernan and Chief Justice Randall Shepard of the Indiana Supreme Court, issued a report in December 2007 that advanced 27 specific recommendations for streamlining local government. One recommendation was to shift assessing duties from thetownships to the counties.

The 2008 General Assembly enacted several reforms recommended by the Kernan-Shepard Commission, as it came to be known. Among other things, lawmakers shifted assessing duties in 965 townships to their respective counties. That law went into effect July 1,2008.

But the legislature decided that voters in the largest townships – those with 15,000 or more parcels of property – should decide the issue for themselves in a referendum that would be held in concert with the Nov.4 election.

MySmartgov.org is organizing a grass-roots effort to persuade voters to vote “yes” on the township assessors’ ballot question. After Nov. 4, the organization will continue its drive to find individual Hoosiers and civic organizations who are interested in common-sense government and who will urge their legislators to enact the rest of the Kernan-Shepard recommendations.

Did You Know?

Property taxpayers in Allen, Vanderburgh, and Vigo counties filed more appeals to their assessments in 2007 than in 2003, after the first market value reassessment. Taxpayers filed 72% more. If the assessment quality is improving, why are there more and not fewer appeals?

THE TOWNSHIP ASSESSORS' REFERENDUM VOTE

Incumbent Assessor’s in St. John, North, Calumet, Ross, Hobart, and Center Townships will face the voters next Tuesday to confront their futures. Voters in these urban or semi urban townships of more than 15,000 parcels will decide whether the township assessor duties will continue to be to be performed by their respective elected township assessors, or will they revert to the county assessor as in 1008 other Indiana townships. This is truly the first step to the elimination of the antiquated township government system.

Affected incumbent assessors have begun their advertising spin, touting the unexcelled job they think they do for the taxpayers. Much of what is promoted is pure rhetoric; ignoring the facts that should be considered; and personalizing the choice to their townships. Many pray the public will be too ignorant to employ the facts. In general, this promotion of township assessors ignores the fact that this could be a one-time, forever decision; there is currently no provision to reconsider this issue in the future.

All Township assessors and their staffs are funded from the County budget, not a township’s. If they are grossly inefficient, they go to the county for a supplement. While a few rural county assessor’s have traditionally been very effective, their jobs are already gone. Some of their staff’s are assumed by the County Assessor to pick up his extra workload. This will also happen after the referendum for those townships voting against their township assessor.

Since all township assessor’s staffs are funded by the county it would seem appropriate that the decision will be county wide. The intelligent voters of St. John Township might choose to delete the very effective Hank Adams, while the less educated voters of Calumet Township might choose to retain Booker Blumenfeld, the least efficient assessor in Indiana. If this referendum were a county wide decision at least we would throw out the bad with the good.

Let’s review a few facts on township assessors:

Township # of staff
North 21
Calumet 32
St. John 16
Winfield 1 Full-time & 2 Part-time
Center 6

Winfield township (who now has no assessor) processed only 20 fewer assessment transactions than Calumet. Compare the staffing!

Center township now accounts for 18% (200M) of total Lake County Assessed value; St. John Township 40%. (this is an imperfect evaluation e.g.: Hammond’s assessed valuation went up 9% with one assessment {Horseshoe}).
Form 11’s are the “Annual adjustment of assessed evaluation”: they are the backbone of an assessor’s job. In 2006 the cost to prepare a form 11 in St. John Township was $6.80, while the cost in Calumet Township was $211.00.
Last year Republican Hank Adams (St. John Township) requested a supplement of $16,000 for additional postage for Form 11’s. Calumet Township requested $98,000 for overtime to do the same job. The County Council cut Hank’s request in half, while reducing Calumet Township’s by $10,000.

Each township assessor appoints a “Chief Deputy”, this is the unelected, certified, specialist who actually runs the assessor’s office. Ross township’s deputy makes half of what Calumet Township’s does.

If the aggregate reduction in assessor staff positions resulting from elimination of township assessors was a mere 25 positions the savings would be half a million dollars.

This decision is in your hands.