Dear Editor,
As a Hamilton County taxpayer, taxpayer advocate and fiscal conservative, the assumption that our Property Assessed Valuations will continue to rise perpetually is troubling. Specifically, I am gravely concerned with the assumption that future tax revenues will ALWAYS be there in a projected growth curve. This mindset leads to a spend first default mode, witnessing firsthand discussions in public county government meetings, a 4 percent annual increase appears to be merely assumed and baked into future spending.
At a recent Hamilton County Council meeting, our County Assessor reported a looming threat and cautioned the Council concerning “dark stores” and the reduction in commercial property Assessed Values. When questioned, she reported that if valuation appeals continue to be lost, she could be forced to lower the Assessed Value of commercial properties in the county by as much as 50 percent. Losing these appeals can reduce cash reserves as the county can be forced to retroactively reimburse property owners for the new lower assessed valuation. Further, it inhibits planned future spending because the assumed tax revenue might not be there. The potential for a perfect storm (lower revenue and reduced cash reserves by returning taxes already received) is real. I call on our county officials to openly evaluate, discuss and prepare solutions before appeals and litigation become more common.
Lower Assessed Values mean less property tax revenue. Lower Assessed Values mean a lower threshold on allowable county debt. Lower Assessed Values lead to tougher spending decisions and ultimately can lead to tax increases. Lower Assessed values can lead to TIF bond payment problems. Lower Assessed Values, if retroactive, require cash rebates to those who win appeals. These rebates that can be six or even seven figures.
As a commercial property owner, I am often approached by companies offering to fight the assessed value on our behalf in exchange for half of the tax savings. This cottage industry’s growth fly’s in the face of assumed increased values and assumed tax revenue increases. Adding insult to injury is our county’s cost to fight each of these appeals. Legal costs are projected to be in the hundreds of thousands of dollars.
Just this week right next door in Boone County (story from the Kokomo Tribune):
Property tax appeal could make history, save millions
Boone County officials have taken steps over the past two weeks to prevent millions in tax revenue loss for multiple municipalities. To prevent that loss, the county opted to spend as much as $400,000 to fight a property tax assessment appeal filed by the Whitestown Meijer store. Locally, the Meijer appeal is for all tax years since the store opened in Whitestown in 2014. Officials said that if the appeal is successful, the county would have to pay back $300,000 to $375,000 for each year Meijer has appealed.
The county is not the only entity that stands to lose money, as the store also pays taxes to the town of Whitestown, Zionsville Community Schools and the Hussey-Mayfield Public Library. Going forward, each entity would also get that much less money from Meijer in property taxes, which would amount to millions in lost revenue in the coming years.
The Whitestown Lowe’s and CVS stores and the Lebanon Menards have also filed appeals.
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This isn’t a question of if; it is happening right now, the fights have already begun. As taxpayers and taxpayer advocates, we must pay attention to the storm coming and hold accountable our county government officials to plan for what’s already happening.
Hundreds of thousands of taxpayer dollars in legal fees isn’t the answer. Quietly ignoring and doing nothing is a decision, too, but it isn’t a viable answer.
There are two ways to address this situation, proactively or reactively. If we wait, the taxpayers could end up footing the legal bills and the county still lose millions of tax dollars in lost property valuation appeal cases. Predictable and proactive solutions are my choice rather than waiting until it’s too late.
Let’s encourage our county officials to get out ahead of this challenge, publicly and proactively addressing it, recognizing the limits of the taxpayers’ wallets. Reasonable people with reasonable data will come to reasonable conclusions. Respectfully, I ask that taxpayers are put first.
Mark F Hall
Hamilton County Council Candidate District 3