CONSTITUTIONAL PROPERTY CAPS BAD IDEA

Attaching an amendment to a constitution is a serious matter, whether it be the United States Constitution or the Indiana Constitution.  Amendments take a lot to pass, and they become virtually set in stone once implanted into constitutions.

So I have been anxiously watching the debate over whether or not to make the property tax caps permanent by placing them in an amendment to the Indiana Constitution.   The flaw in taking this step is that even if they are made permanent in this manner, all that has to be done is raise the assessment.

Short on funds?  Just assess properties at a higher value.  My property taxes went up 50% instead of going down like I had thought they would.  And that was after an adjustment.  When I opened my bill, I was stunned to see that my assessed value had jumped $44,000 from the year before.

After I recovered from the shock, I called the assessor’s office to discuss how this was possible.  The clerk who helped me was very nice and resolved my concerns by lowering my assessed value by $20,000, so my final increase was a mere $24,000.  This got me to thinking – what difference does a cap make if the assessment can be raised or lowered this easily?

Attaching an amendment to our Constitution only freezes the top rate that can be levied.  To increase property tax revenue, all that has to be done is to increase the assessed values of properties.   The caps – whether they remain simply a legislative enactment or become a constitutional amendment – do not resolve property tax issues.

But making the caps a part of the Constitution before we have had a chance to see how they will work is simply a bad idea that will compound an already easily manipulated system.

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About Charlotte A. Weybright

I own a home in the historical West Central Neighborhood of Fort Wayne, Indiana. I have four grown sons and nine grandchildren - four grandsons and five granddaughters. I love to work on my home, and I enjoy crafts of all types. But, most of all, I enjoy being involved in political and community issues.
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8 Responses to CONSTITUTIONAL PROPERTY CAPS BAD IDEA

  1. Pete C says:

    Wow — who knew a phone call would have made any difference? I’m great at overlooking the obvious. As I understood the appeal process, the property owner has to pay for an assessment. So it was a choice of paying the over-assessed tax or paying a private assessor, and perhaps still paying the higher tax.

    It looked like a scam-deal, but I thought we might as well leave the assessment as-is, until we learn whether or not the property is locked into a buyout plan by local government.

    This is just my particular situation, but as I looked at the appeal instructions I wondered just how much more of this sort of scam-artist legislation people are going to swallow, before they spit tacks and demand a halt to the BS!

  2. Constitutional amendments are intended to be broad themed measures that represent the philosophical values of the state’s citizens. A property tax cap certainly does not fall under this category.

  3. Julie Creek says:

    Charlotte:

    I’m no expert, but I’ve done a little bit of writing about the circuit-breaker bill and I absolutely agree with you that the legislature has no business enshrining this concept into the constitution without understanding its effect on the ability of local governments to even deliver basic services and pay their bills. There are dozens of unanswered questions about how revenues will be affected by larger economic conditions, etc.

    In regard to your question about assessments, the 1998 Indiana Supreme Court decision ordered the state to begin linking assessments to some kind of objective measurement, which ended up effectively being market value. The old system had substantially undervalued older homes in relation to their market values by assessming them based on an original replacement cost basis, which might explain why your assessment increased so dramatically this time around. AV’s are now determined by comparing your house to the sale prices of similar houses in similar neighborhoods. Perhaps they lowered your assessment because of an error in calculating your AV. But this also raises a larger question: What happens to the revenues needed to run local government during an economic recession that dramatically affects housing prices? When the legislature passed HB1001 almost two years ago, housing prices were expected to rise forever; they couldn’t conceive of the housing market tanking. Now that it has, local governments are expected to live with the fallout – in perpetuity…

  4. Marymary says:

    By the way, is that your house Charlotte? It is beautiful.

  5. Pete:

    I know – I was completely surprised at getting results so quickly. The person I talked to referred to West Central as “a little funky.” But, hey, I like the idea that we live in a funky neighborhood. 🙂

    I think that in the end the property tax “fix” will be seen for what it is – a panacea without any real solutions to many of the state’s problems.

  6. Hi Julie:

    Good to hear from you. I am not too familiar with assessment processes, but it seems to me that all assessments of property are educated guesses.

    My home was probably a tad lower than a couple around me, but I was really stunned when I saw the huge increase.

    Excellent point about government and revenues. When housing markets tank, the values dip, and then – theoretically – property taxes should go down. The downward pressure on the market then decreases the intake of funds for local governments.

    Maybe the legislature will again revisit the issue. I just hope they don’t implant the caps into a constitutional amendment.

  7. Marymary:

    Yes, it is mine. I have been here for 14 years this month. Originally, it was a duplex, and I rented the downstairs apartment before I bought it in 2001. I then turned it into a single residence. I just didn’t want people upstairs in my home!

    It does take a lot of work, but I love doing as much as I can. I have all kinds of power tools, hand tools, you name it so I can do most of my work myself.

    I love the West Central Neighborhood, but I do flood. I live in the what I call the “cup” area at Thieme, Nelson, and West Berry, which has flooded 4 times in 5 1/2 years. My kids have given up on telling me to sell. They know I will be here until I am carted out.

  8. Marymary says:

    I admire your persistence in spite of the floods and your hard work. 🙂

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