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April 5, 2014

Tardy assessments hamper local budgets

Vigo’s land-value estimates submitted near last each year, drawing city officials’ ire

TERRE HAUTE — The Vigo County Assessor’s office has come under criticism in the past several months for the timeliness of its reports to the State of Indiana.

Mayor Duke Bennett has publicly said that delayed approval from Indianapolis of the county’s annual budgets — at least partially a result of tardy assessment information — makes his job more difficult. That’s because the city can’t know for certain what its budget will be in a given year until the county’s overall budget gets state approval.

In Indiana, the first step in local government budgeting is assessing property in a county. That’s because property taxes – which are based on assessed value – provide a large portion of the funding for local governments. Assessors must put a dollar value on every land parcel in the county – more than 60,000 in the case of Vigo County. It’s a job that must be done each year. If it takes extra time, the county’s final budget approval could be delayed.

“The entire property tax system relies on the actions of several offices to ensure it runs smoothly,” said Jenny Banks, director of communications for the Indiana Department of Local Government Finance, which oversees the budgets of all 92 of Indiana’s counties. “When a delay occurs at any time in the process, this can create a domino effect on the remaining actions that must occur.”

The county assessor — using mind-numbing facts and figures such as cost tables, depreciation tables, recent arms-length sales disclosures, trending and so on — is responsible for calculating gross assessed value in the county. A first big step in that process is to develop a “ratio study,” which is based on assessed values compared with actual sales during a specific 14-month period. There are generally thousands of such sales to examine.

Vigo County has been among the last of Indiana’s counties to submit ratio studies in the past few years, a point not lost on Mayor Bennett, who believes that lateness has delayed final approval of the city’s budget each year by the Department of Local Government Finance.

“It does make it difficult for us to budget,” Bennett said in telephone interview with the Tribune-Star on Thursday. “It would be great if we could get the data sooner.”

Racing against time

According to emails from the DLGF to the City of Terre Haute, obtained through a public records request, Vigo County was the 89th of 92 counties to submit a ratio study to the state in 2013 and 90th in 2012.

The City of Terre Haute’s 2012 budget was not approved by the state until March 21 of that year — nearly four months into the budget year. The city’s 2013 budget was approved March 12.

When budgets are approved so late in the year, it requires the City to make changes in its actual spending plans, Bennett said. Last year, for example, city officials learned in March they needed to cut about $1 million from their proposed budget.

The State of Indiana recommends county assessors turn in their ratio studies each year by May 1 — a date few counties meet. In 2012, for example, only 15 of 92 counties had submitted ratio studies three weeks after the deadline had passed.

Many factors influence when a county can complete its ratio study, said Debbie Lewis, Vigo County assessor. As recently as 2010, (for the 2011 budget year) Vigo County was able to complete its ratio study by June 9, making it among the earliest in the state. The following year it was completed in August and in the next year not until October.

For the 2014 budget year, Lewis submitted Vigo’s ratio study on Sept. 9 — more than five weeks earlier than the pervious year. This year, working on figures for Vigo County’s 2015 budgets, is going better still.

“We are well in advance of where we were last year,” Lewis said, adding her target date this year is to be not later than July. “Baring a catastrophe, we ought to be able to make that.”

Despite the lateness of its most recent ratio studies, for at least the past 10 years, Vigo County’s property tax bills have been mailed on time, Lewis said. The DLGF’s Banks made the same point.

“Even with a later submission date for a [2014 budget year] ratio study, the [DLGF] was still able to certify the Vigo County budget order by the statutory deadline of Feb. 15, 2014, she said.

Time and manpower

Some counties can assemble their assessment data quicker than Vigo because they are less complicated, Lewis said. For example, Dearborn County, always one of the first to complete its budget process, has fewer than half as many land parcels, she said. And county’s that are primarily agricultural have less work to do because farm land is not subject to the same “trending” rules of other land, she said.

“I’d like to be in the middle of the pack” in comparison with other counties, Lewis said. “Every year we make an effort to be there.”

Lewis also points to the size of her staff. Vigo County has been among the hardest-hit counties in Indiana from the state’s property tax caps, meaning the county’s budget has been tight. The assessor’s office lost one staff member to a county “buy out” in 2010, she said. When Lewis became assessor in 2002, she had three more staff members in her office than she has today.

Meanwhile, state requirements frequently change, Lewis said, creating more work. In addition to their regular duties, which include things such as logging sales disclosures, monitoring mobile home sales, tax exemptions and oil leases, staff in the assessor’s office must deal with questions from the public, answer telephones and so forth, she said.

“They’re very, very busy,” Lewis said. “There are not enough hours in the day or people to spread around.”

Clark County, which has approximately the same population size as Vigo County and a similar proportion of agricultural land, had a nine-person assessor’s office staff in 2013, according to the state’s Gateway website. Vigo County had a staff of eight on the county assessor’s office payroll in 2013 in addition to an approximately nine staff members in the Harrison Township Assessor’s office, not including part-time help, according to Gateway. The Harrison Township Assessor’s office maintains property records for all of Harrison Township, which includes most of the City of Terre Haute. The Vigo County Assessor’s office maintains records for the county’s other townships.

Clearly, the state of Indiana has taken notice of Vigo County’s assessment timeline. According to emails obtained from the DLGF through a records request, state officials sought updated status reports from Lewis in July and August of last year for the 2014 budget year.

But communication with the state is not unusual, Lewis said.

“They are there to push us along and see what they can do to help,” Lewis said. “I have a good working relationship with them.”

Asked whether she should delegate more to her staff, Lewis, who is clearly familiar with every step in the assessment process, said she delegates as much as she can.

“I probably could go faster, but would it be good?” she asked. Everything she submits to the state must be supported by data, she said. If mistakes are made, the data would have to be corrected and resubmitted.

“It’s time and manpower,” Lewis said. “Every year we try and anticipate a better way of doing it.”

Reporter Arthur Foulkes can be reached at 812-231-4232 or arthur.foulkes@tribstar.com.

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