STATEHOUSE—An amendment offered by State Rep. Tom Dermody (R-LaPorte) to address the ongoing property tax problems in LaPorte County was approved by the Indiana House on Monday. With the amendment, Senate Bill (SB) 19 would establish taxpayer protections, incentivize responsible leadership from local officials, and give the county commissioners more control to remedy the situation.
Recently, taxpayers were notified they had 10 days to pay property tax bills from 2007. SB 19 would give taxpayers at least 18 months to send in their payments, or more if the county council decides to extend the deadline. In an effort to encourage prompt payments, the council could grant a tax credit of up to 2 percent of delayed property taxes if the taxes are paid within 30 days. To make payments easier, the county treasurer would be required to accommodate individuals using a debit or credit card. Additionally, the county would be prohibited from placing a property on tax sale for at least one year after the payment deadline.
“We encourage people to plan ahead and budget for their expenses, but it’s impossible to ask someone to anticipate a tax bill from 5 years ago when they’re only given 10 days to pay,” said Rep. Dermody. “This uncertainty makes LaPorte County unattractive to businesses looking to locate in northwest Indiana, causing residents to miss out on the jobs these businesses would bring.”
To encourage county officials to fix the property tax issue in a timely manner, SB 19 would require the county to set aside $4 million over a period of four years. This fund would go to reimburse cities, towns, schools, and libraries that relied on the county to collect property taxes, but had to take out high-interest loans to continue operating. If tax bills from through October 2011 are sent out by February 28, 2013, the amount the county would be required to pay for interest would be reduced to one million dollars. If the bills are sent out by January 15, 2013, the county would be free from paying the interest.
“The county will have to choose between sending out property tax bills and repaying the local units that were forced to incur millions of dollars in interest,” said Rep. Dermody. “Ninety-one other counties manage to collect their property taxes each year, so hopefully this point will be emphasized to LaPorte County.”
Another measure in the legislation would allow the county commissioners to remove the treasurer and auditor from the property tax collection process and appoint a ‘special master’ to handle the duties. The commissioners would directly oversee the person responsible for property tax collection, ensuring the job is done correctly.
“This has been a serious issue for far too many years,” said Rep. Dermody. “There are many causes in LaPorte County that could have benefited from the millions of dollars in interest that were lost when local units were forced to support themselves. We need to move forward and collect the property taxes necessary for our cities and schools to function without punishing taxpayers for a situation out of their control.”
To read Rep. Dermody’s amendment, go to www.in.gov/legislative. On the left side of the screen, select ‘Overview’ under ‘Bills and Resolutions,’ and enter 19 for the bill number. The amendment can be found under ‘House Amendments’ as