Treasurer advises against tax protest

I was amused by this headline in the Evansville Courier Press: Treasurer advises against tax protest. In other news, the fox advises hens to leave their doors unlocked.

In this case, actually, the Treasurer is right. Apparently a taxpayer by the name of Joe Webb is protesting a steep increase in the taxes he owes on his property caused by “trending.” Webb plans on only paying what he owed on the 2005 (pay 2006) assessment. His 2006 assessment (payable in 2007) is much higher because the value of his property is deemed to be $196,200, up from $115,300. Some of that is just fun with numbers — the total tax dollar amount received by a county is essentially capped by the state government. Property tax payers contribute their pro rata share based on the value of their property compared to the total value of the property in the county. So, if the value of everybody’s property increases by 10%, everybody’s tax bill stays the same. (At least with respect to the value of the property – taxes can go up or down for reasons unrelated to a property’s value.) The size of the property value increases are more jarring than usual because of “trending”. That’s the term used to require assessment values to be adjusted every year. However, for a variety of reasons, this was not done for the first few years after 2002. So, the property valuation reflects the increase from 2002 to 2006.

In Webb’s case, however, his tax bill appears to have almost doubled. I have no idea how that compares to the rest of Vanderburgh County. Obviously you’re much less likely to hear from citizens whose property tax bills have gone down due to reassessment. Generally speaking, counties are not getting a lot more money to work with even though some citizens are paying a lot more money. This means there has been a tax shift. For example, the State is using more of its revenue for state purposes and contributing less to counties to subsidize property taxes. Reassessment is also probably shifting the burden from certain types of property to other types of property. I know under the old system of assessment — declared unconstitutional by the state Supreme Court — old, but high value, residential properties were substantially undervalued. Under the new system, as those properties shouldered more of the burden, some types of properties consequently shouldered less. I don’t know off hand what types of properties those are, but their owners obviously are not making a big fuss.

Back to Webb’s protest. He plans on paying less than what his tax bill shows as due. Almost certainly he will end up paying more in the end even if it turns out that he was assessed too much. He will have the right to appeal his assessment to the Vanderburgh County Property Tax Assessment Board of Appeals (PTABOA). They may well lower his assessment, but it seems unlikely that they will lower it all the way to last year’s levels. He’ll end up paying a 10% penalty on whatever he underpaid. He says he doesn’t care, he’s standing on principle. I guess the other citizens of Vanderburgh County should thank him — either because he’s taking up the cause or because he will ultimately pay more taxes to the community than he has to or both.

[tags]taxation, property taxes[/tags]