Fight over commercial property tax increases

   As mentioned here before, Huntington, Indiana had a shortfall of 1.7 million dollars in its tax revenues. This has led to layoffs of city personnel, proposed rate increases, a fight over Local Option Income Tax, and the possible trimming of city services.
   Herein lies the bulk of the problem. The city is short of funds and the economic climate is bad. Unemployment is high, the city has lost valuable companies, and home values are dropping because of foreclosures. On top of all of this, the federal government has seen fit to mandate a major infrastructure overhaul of the transfer systems for the sewage system, without aid in the funding.
Understandably, the citizens of a community get peeved at property tax increases, and even more so, when the economy is tanking. But one has to be realistic. There are only two ways for a city to make sure that there is money to allow it to function. Tax revenue and service fees. Whether one likes it or not, that is the way the system was set up, and the way it works.
    Yesterday, on a local political call in show, the owner of a local flower shop and ice cream parlor discussed, with the shows host, her dismay to find her business property assessments had caused her tax bill to sky rocket. The businesses are located in the most northern part of the city proper. Over the last few years, this commercial area has made expansions, required additional infrastructure, and has been reassessed for tax purposes.
    Taxes are based on fair market value. The way of assessing was changed in 2002, when in 1999, the Indiana State Supreme Court had ruled that the assessment used at that time was unconstitutional. The new process is called trending. During the assessment, the assessor uses the property sales figures for a certain area, from the last two years, that surround the property in question. The value is based upon the amount that the property could sale for at the time the assessment was done. There are four reasons that a tax bill goes up. They are: an increase in the assessed value, an increase in the district's tax rate, a combination of the former two, and the assessor making corrections to an under assessed property.
    The business owner said she didn't understand how her bill could have increased so drastically between 2002 and her current tax bill. Here is a rundown of all commercial and residential activity that has occurred in the last seven years in area surrounding her business. There has been the additions of a new farm retail outlet, a college sub campus, new apartment buildings, two banks, a church, various single business buildings, the improvements to a hotel, movie complex, two restaurants, two car lots (now out of business), a new strip mall, a major expansion by the local Walmart from a small store to a Supercenter, and a retail outlet for a local distribution center. All of these businesses require infrastructure. They need the roads, utilities, and emergency services. These all cost money to provide and increase the property values within that area.
    When the business owners receive there new assessments at the end of the year, they have the right appeal. Nobody appreciates the need to dig deeper, and cuts could be made within the administration to help offset the city's financial needs. But property tax increases are a fact of economic nature. Despite their unpopularity, as costs increase to run the functions of the city, taxes (and their increases) are a necessary evil.
   Local City Councilman, Steve McIntyre called into the show stating that there was a proposed rate increase for local utilities that has yet to be voted on. He also commented that he had emailed some suggestions to Mayor Updike and was waiting for a response.